CHILD SUPPORT LEGISLATION AMENDMENT
(REFORM OF THE CHILD SUPPORT SCHEME – NEW FORMULA AND
OTHER MEASURES) BILL 2006
NOTES ON CLAUSES
Clause
1 sets out how the Act is to be
cited, that is, the Child Support Legislation Amendment (Reform of the Child
Support Scheme – New Formula and Other Measures) Act 2006.
Clause
2 provides a table that sets out the
commencement dates of the various sections in, and Schedules to, the Act.
Clause
3 provides that each Act that is
specified in a Schedule is amended or repealed as set out in that Schedule.
Clause
4 enables the Registrar to obtain
information from a person where it is reasonably necessary to do so for the
purposes of this amending Act.
This
Explanatory Memorandum uses the following abbreviations:
- ‘Child
Support Assessment Act’ means the Child Support (Assessment) Act 1989;
- ‘Child
Support Registration and Collection Act’ means the Child Support
(Registration and Collection) Act 1988;
- ‘Family
Assistance Act’ means the A New Tax System (Family Assistance) Act 1999;
- ‘Family
Assistance Administration Act’ means the A New Tax System (Family
Assistance) (Administration) Act 1999;
- ‘Family
Law Act’ means the Family Law Act 1975;
- ‘Social
Security Act’ means the Social Security Act 1991;
- ‘Social
Security Administration Act’ means the Social Security (Administration)
Act 1999; and
- ‘Taskforce
Report’ means the Report of the Ministerial Taskforce on Child Support, In
the Best Interests of Children – Reforming the Child Support Scheme.
Schedule 1 – The formulas
Summary
This
Schedule repeals Part 5 of the Child Support Assessment Act and
replaces it with a new Part 5 that provides a new series of child support
formulas. The new formulas are based on recent Australian research on the
costs of caring for children, taking account of both parents’ incomes after
equal self‑support amounts are deducted, recognising care of a child for
more than 14 per cent of the time, and treating first and second families more
equally.
Background
The
new administrative assessment adopts an ‘income shares’ approach to calculating
the costs of raising children and sharing these costs fairly between parents.
It involves working out the combined incomes of the parents, determining the
costs of the parents’ children by reference to their combined incomes, then
distributing those costs between the parents in proportions equal to their
share of the combined income, taking into account the contribution to the costs
of the children they may make through providing care for the children.
Part 5
recognises that sometimes only one parent’s income can be used for an
assessment, for example, where the other parent is deceased or is not able to
be found. In these situations, if a non-parent carer is providing care for a
child, the surviving, or available, parent’s income only is used for the
assessment.
Child
support assessments will be based on the actual costs of children, which have
been determined according to Australian research showing that, as parental
income rises, spending on children rises in dollar terms but falls as a percentage
of income, and that expenditure on children increases as they get older. The
costs of children for Part 5 represent the best estimate of the amount
that parents, on average, spend on their children according to their income.
Explanation of the changes
Item 1 repeals Part 5 of the Child Support Assessment Act
and substitutes it with new Part 5.
INTRODUCTORY
MATTERS
Part
5 has nine Divisions, which deal with:
·
the simplified outline of the new
assessment scheme (Division 1);
·
the formulas used for assessing
child support (Division 2);
·
the child support income used in
an assessment (Division 3);
·
the amount of care that a parent
or non-parent carer provides for their child (Division 4);
·
other elements of the formulas
(Division 5);
·
the costs of the child (Division
6);
·
assessments and estimates of
adjusted taxable income (Division 7);
·
general provisions relating to
making assessments (Division 8); and
·
liability to pay child support as
assessed (Division 9).
A number of defined terms is used for the purposes of
assessing child support under
Part 5 and following is
a glossary of these terms.
Carer entitled to child support A
parent, or non-parent, carer who is entitled to be paid child support as a
result of an administrative assessment.
Care period A
period of 12 months used to determine the amount of care a person provides for
a child (section 48).
Child support case The
total of all the assessments of child support for all children who have the
same parents (section 5). For example, if Joe has two children with his
ex-partner, Susan, and is assessed for child support in respect of these
children, this is one child support case. If Joe has another child with a
different ex-partner, Nita, and is assessed in respect of this child, this is
another child support case. Joe therefore has two child support cases.
Child support income The
income used to determine the costs of a child. It is made up of adjusted
taxable income (section 43) minus a self-support amount (section 45)
and, if relevant, minus a relevant dependent child amount (section 46)
and/or a multi-case allowance (section 47).
Child support percentage The
parent’s income percentage minus their cost percentage (section 55D)
Child support period The
period of time for which a child support assessment applies (section 7A).
Combined child support income The
sum of each parent’s child support income (section 42).
Costs of a child The
costs of a child measured by reference to the parents’ incomes, or parent’s
income, where relevant (sections 55G and 55H).
Costs of the Children Table The table
that provides how much children cost by reference to their parents’ combined
incomes, or parent’s income where relevant (section 5 and
Schedule 1).
Cost percentage The
percentage of the costs of a child that a parent meets by providing care,
worked out in accordance with the table in section 55C (section 5).
Eligible carer A
person who has at least shared care of a child, that is, at least 35% (section 7B).
Income percentage Each
parent’s proportion of their combined child support income (section 55B).
Liable parent A
parent who is required to pay child support to a carer or carers for a child
support case following an assessment (section 5).
Multi-case allowance The
total of the multi‑case child costs for all the children who are not in
the particular child support case being assessed (section 47).
Multi-case cap The
parent’s multi‑case child costs for a particular child minus the parent’s
cost percentage for this child (section 55E).
Multi-case child costs The
costs of each of a parent’s child support children in all of their child
support cases, based on this parent’s income only (section 47,
Step 4).
Non-parent carer A
person who has at least 35% care of a child, but who is not a parent, or the
partner of a parent, of a child in respect of whom an assessment is made
(section 5).
Parenting plan A
parenting plan as defined under section 63C of the Family Law Act.
Percentage of care The
amount of care a parent is likely to have for their child over a 12 month
period, expressed as a percentage (section 48).
Post separation costs The
amount by which a parent’s adjusted taxable income for a year can be reduced in
respect of a particular child if, within three years of separating from the
other parent of the child, the parent earns additional income (section 44).
Regular care Care
provided for a child that is between 14% and less than 35% (section 5).
Relevant dependent child amount The
cost a parent incurs for a biological or adoptive child that lives with them
and is not the subject of an administrative assessment (section 46).
Self-support amount The
amount deducted from a parent’s adjusted taxable income for their own support
(section 45).
Shared care Care
for a child that is at least 35% and not more than 65% (section 5).
THE
DIVISIONS IN PART 5
Division 1 - Simplified outline
Section
35A sets out a simplified outline for Part 5. It provides that Part 5
includes all the formulas for assessing the annual rate of child support
payable by a parent for a child in a child support period (other than in cases
where the rate is worked out in accordance with a child support agreement, a
Registrar’s determination under Part 6A or a court order).
Section
35A also provides that the Costs of the Children Table in new Schedule 1
to the Child Support Assessment Act sets out the costs to the parents to raise
children in various age ranges. These costs are to be met by both parents,
either by paying child support or caring for their children, according to each
parent’s capacity to meet the costs. The Costs of the Children Table is to be
published by the Secretary each year.
The
costs of the children are to be met by both parents (either by paying child
support or caring for their children) according to each parent’s capacity to
meet the costs. To determine each parent’s capacity to meet those costs, the
parents are assessed in respect of the costs of the child.
Section 35A notes that, generally, both parents’ income is taken
into account to determine each parent’s capacity to pay for the costs of their
children.
The
formulas also allow child support to be worked out for non-parent carers.
Finally,
section 35A points out that, in some cases, the annual rate of child
support payable by a parent is assessed under Subdivision B of
Division 8, which deals with annual rates of child support payable by
parents on low incomes and minimum rates of child support.
Division 2 – The formulas
Division
2, Subdivision A – Simplified outline
Section
35B provides a simplified outline of Division 2.
The
outline provides that the Costs of the Children Table in Schedule 1 to the
Child Support Assessment Act, published by the Secretary each year, sets out
the costs to parents of raising children in various age ranges. These costs
are to be met by both parents either by paying child support or caring for
their children, according to each parent’s capacity to meet the costs.
The
outline then refers to the six formulas in Part 5. It provides that
Formula 1 applies if both parents’ incomes are taken into account to determine
each parent’s capacity to meet the costs of their children, each parent only
has one child support case and there is no non‑parent carer involved in
the assessment. Formula 2 applies if both parents’ incomes are taken into
account to determine each parent’s capacity to meet the costs of their
children, each parent only has one child support case and at least one non‑parent
carer is involved in the assessment. Formulas 3 applies if both parents’
incomes are taken into account to determine each parent’s capacity to meet the
costs of their children, at least one of the parents has multiple child support
cases and there is no non‑parent carer involved in the assessment.
Formula 4 applies if both parents’ incomes are taken into account to
determine each parent’s capacity to meet the costs of their children, at least
one of the parents has multiple child support cases and there is at least one
non‑parent carer involved in the assessment. Formula 5 applies if one
parent’s income only is taken into account to determine that parent’s capacity
to meet the costs of their children (for example, because the other parent is
not a resident of Australia). Formula 6 applies if one parent is deceased and
the surviving parent’s income only is taken into account to determine that
parent’s capacity to meet the costs of their children.
Section
35C provides that the formulas contained in Part 5 are used in the
administrative assessment of child support that a parent is to pay for a child,
unless there is a departure determination made by the Registrar (Part 6A
of the Child Support Assessment Act), a court order for departure from the
administrative assessment in special circumstances (Division 4 of Part 7
of the Child Support Assessment Act) or any provisions of a child support
agreement made between parents that have effect, for the purposes of
Part 5, as if they were such an order made by consent. This maintains the
current rule in section 35 of the Child Support Assessment Act.
The
six formulas in Division 2 use a number of key concepts, largely contained
in Divisions 3, 4, 5 and 6 of Part 5, which would be usefully
described at this point before turning to the operation of the formulas.
Consequently, these Divisions will be dealt with before dealing with the
formulas in Division 2 in detail.
Division 3 – Child support income
Division
3, Subdivision A – Preliminary
Section 40E
sets out a simplified outline of Division 3. It provides that the income used
to determine a parent’s capacity to meet the costs of their children will be
reduced by:
·
a self-support amount, to take
account of parents’ needs to support themselves;
·
a relevant dependent child amount
if the parent cares for a relevant dependent child;
·
a multi-case allowance if the
parent has multiple child support cases.
The relevant dependent child amount and the multi-case
allowance take account of the costs of relevant dependent children, and
children in other child support cases, in a similar way to the way in which the
costs of the children are worked out for children in a child support case.
The outline then notes that either parent’s adjusted
taxable income for a year can be reduced (under section 44) in respect of
a particular child if, within three years of separating from the other parent
of the child, the parent earns additional income (called post-separation
costs).
Division
3, Subdivision B - Child support income and combined child support income
Subdivision
B of Division 3 provides rules for determining a parent’s child support income
and the parents’ combined child support income.
The
parent’s child support income
Section
41 sets out how to work out a parent’s child support income.
Subsection 41(1)
provides that if a parent is to be assessed in respect of only one child
support case and has no relevant dependent children, the parent’s child support
income is their adjusted taxable income minus the self-support amount.
Subsection 41(2)
provides that where a parent is to be assessed in respect of only one child
support case, and they have at least one relevant dependent child, the parent’s
child support income is their adjusted taxable income minus the self-support
amount and minus an amount to recognise the costs to the parent of the relevant
dependent child living with them, called the relevant dependent child amount.
The relevant dependent child amount is calculated in accordance with
section 46.
Subsection 41(3)
provides that if a parent is to be assessed in respect of more than one child
support case and they do not have a relevant dependent child, the parent’s
child support income is their adjusted taxable income minus the self-support
amount and minus a multi-case allowance to recognise the costs to the parent of
children in another child support case. The multi‑case allowance is
calculated in accordance with section 47.
Subsection 41(4)
provides that where a parent is to be assessed in respect of more than one
child support case and they have at least one relevant dependent child, the
parent’s child support income is their adjusted taxable income minus the
self-support amount minus their relevant dependent child amount minus their
multi-case allowance
Subsection 41(5)
provides that a parent’s child support income is taken to be nil if the amount
worked out under any of subsections 41(1) to (4) is negative.
The parent’s
combined child support income
Section
42 provides that the parents’ combined child support income is worked out by
adding together each parent’s child support income.
Division
3, Subdivision C – Working out the components of child support income
Subdivision
C of Division 3 provides for how to work out the components of child support
income, that is, adjusted taxable income, post-separation costs, the
self-support amount, the relevant dependent child amount and the multi‑case
allowance.
Adjusted
taxable income
Section 43
deals with a parent’s adjusted taxable income, which, essentially, is
calculated in the same way as it is under the current scheme. Section 43
provides that it is made up of the following components for the last relevant
year of income (as defined in section 5 of the Child Support Assessment
Act):
·
the parent’s taxable income
(paragraph 43(1)(a);
·
the parent’s reportable fringe
benefits total (paragraph 43(1)(b);
·
the parent’s target foreign
income (paragraph 43(1)(c);
·
the parent’s net rental property
loss (paragraph 43(1)(d); and
·
the total of certain tax free
pensions and benefits received by the parent (paragraph 43(1)(e).
Taxable
income (defined in section 56 of the Child Support Assessment Act) and
reportable fringe benefits amounts are defined in the same way as they are in
the current scheme (in section 5 of the Child Support Assessment Act). The
term target foreign income is replacing the term exempt foreign
income to ensure that, as much as possible, consistent terminology is used
both for family assistance law and child support law. The definition of target
foreign income is also being aligned with the definition of target foreign
income in the family assistance law. Similarly, the term rental property
loss is being replaced with the family assistance term net rental
property loss for consistency. However, no changes are made to how it is
calculated.
To
also align the calculation of income for child support purposes with family tax
benefit treatment, certain non-taxable income support payments will now be
included in a person’s income. Under the family assistance law, certain
pensions and benefits that are income tax exempt are included in the
calculation of income for determining a person’s entitlement to family tax
benefit. Including these income payments in the calculation of adjusted
taxable income recognises that, although many parents who receive these
payments may not be able to work at all, some have a capacity to contribute to
the costs of their children, and these resources should therefore be included
in their available income. Item 57 in Schedule 2 inserts a
definition, into section 5 of the Child Support Assessment Act, of tax
free pension or benefit that lists the benefits and pensions to be included
in adjusted taxable income and also provides that it is only included in a
person’s adjusted taxable income to the extent that it is exempt from tax and
is not a payment by way of bereavement allowance, pharmaceutical allowance,
rent assistance, language, literacy and numeracy supplement or remote area
allowance. This mirrors the extent to which these payments are treated as
income in the family assistance law.
A
note at the end of subsection 43(1) provides that other provisions that
relate to a person’s adjusted taxable income are section 34A and
Subdivisions B and C of Division 7. A second note points out that
the components of adjusted taxable income (set out in paragraphs 43(1)(a)
to (e)) are defined in section 5.
Subsection 43(2)
provides that if the Registrar amends an assessment under section 44,
then for the purposes of the assessment, the person’s adjusted taxable income
is the amount determined by the Registrar.
Further
detail about assessments and estimates of adjusted taxable income is dealt with
in Division 7.
Post-separation
costs
Section 44
sets out how post-separation costs are to be assessed. It recognises that a
parent may have extra costs to re-establish themselves following separation
from the other parent of their child, whether they provide care for the child
or not. As a result of these extra costs, a parent may take on overtime work
or a second job. The parent’s child support liability should not necessarily
be increased as a result of this extra income. However, as a parent’s costs to
re-establish himself or herself diminish over time, section 44 is limited
to the first three years after the parents last separated before the
commencement of the child support case. Section 44 allows a new
three-year period from a subsequent separation to be considered under an application
so long as the other requirements are met. Subsequent separations from a
different partner will attract a new three-year period if the parent has a
child support case with that parent. That is, the parent would make an
application in accordance with this section in relation to the new child
support case. Parents will have to reapply for the lower level of income for
each new child support period if applicable.
Subsection 44(1)
provides that a parent (the applicant) may apply to the Registrar to amend an
assessment of child support for a child for part of a child support period if
certain criteria are met. These criteria are that:
(a)
the applicant and the other
parent lived together on a genuine domestic basis for at least six months; and
(b)
the last separation of the
applicant and the other parent before the application for administrative
assessment was made occurred within the last three years; and
(c)
at the time of the application,
the applicant and the other parent remain separated; and
(d)
in the last relevant year of
income, the applicant earned, derived or received income in accordance with a
pattern of earnings that was established after the applicant and the other
parent last separated (see paragraph 44(1)(b)), and that would not have
been reasonable to expect in the ordinary course of events. Income that would
have been earned in the normal course of events, such as an annual pay rise, is
not additional income for the purposes of paragraph 44(1)(c). An
application for the lower level of income may not be necessary if, for example,
the income pattern has reverted to what it was before the parents separated.
Subsection 44(2) provides that if the applicant
makes an application, the Registrar may determine that the applicant’s adjusted
taxable income for the child for a day in the child support period is an amount
that excludes the income referred to in paragraph 44(1)(d). That is, the
Registrar may set the applicant’s income at a level lower than that currently
being used in the child support assessment.
Subsection 44(3) provides that the Registrar may
only make a determination under subsection (2) if the determination:
(a)
reduces the
applicant’s adjusted taxable income for the child for a day in the child
support period by 30% or less. Where reducing the applicant’s income by all of
the additional amount would reduce it by more than 30%, the Registrar can
reduce it by 30%. This is consistent with the current policy treatment of extra
income in the change of assessment process and ensures that children receive an
adequate amount of child support; and
(b)
applies in respect of
a day in a child support period that is less than three years after the day on
which the applicant and the other parent last separated as mentioned in subsection
44(1)(b).
Paragraph 44(3)(b) applies as set out in the
following example:
Ted has an income of $30,000 at the date
of separation from his wife. After separation, his income increases to $60,000
as he takes on a second job. His child support liability is assessed on
$60,000, as that was his income for last relevant year of income. Ted can
apply to have his income set at $30,000 rather than $60,000, the extra $30,000
being additional income earned for re-establishment costs. However, even if his
application is successful, his current income used in the assessment, that is,
$60,000, can only be reduced by a maximum of 30%. Therefore, his income would
be set at $42,000. Ted has $18,000 quarantined from his income before the
self-support component is deducted and his children receive child support based
on an income for him of $42,000.
Subsection 44(4) provides that the Registrar is
to take such action as is necessary to give effect to the determination by
amending any administrative assessment that has been made in relation to the
child support period.
Subsection 44(5)
provides that if the Registrar refuses to amend an assessment under
subsection 44(1), the Registrar must serve written notice of the decision
on the parent who made the application. Subsection 44(6) provides that
the notice must include, or be accompanied by, a statement to the effect:
(a)
that the parent may, subject to
the Child Support Registration and Collection Act, object to the particulars of
the assessment in relation to which the parent sought to make the application;
and
(b)
that if the parent is aggrieved
by the decision, he or she may, subject to the Child Support Registration and
Collection Act, apply to the SSAT for review of the decision.
Item
11 of the table in subsection 80(1) provides that a person may object to
the particulars of an administrative assessment.
Subsection 44(7) provides that section 44
does not affect the operation of section 160 (notification requirements)
or prevent the Registrar from making a new assessment for part of the child
support period. A note at the end of the section provides that section 44
does not limit the power under section 75 to amend assessments.
Self-support
amount
As
with the current scheme, the self-support amount recognises the costs to the
parents of supporting themselves. However, the self‑support amount under
the current scheme is considered too low, arguably creating a disincentive for
paid work. Consequently, the self-support amount is being increased to an
amount equal to 1/3rd of Male Total Average Weekly Earnings (MTAWE).
In September 2005 MTAWE was $50,378, which would have made the self-support
amount for 2006 $16,793. This self‑support amount is defined in
section 45, which also provides that the MTAWE figure to use in the
calculation is the annualised MTAWE figure for the relevant September quarter.
A note at the end of section 45 advises the reader that a parent’s self‑support
amount can be varied by a Registrar‑initiated determination (under
section 98S) or a court order (under section 118), as is currently
the case. If a parent’s adjusted taxable income is less than the self-support
amount, their child support income will be nil (subsection 41(5)), as only
income above the self-support amount is taken into account for the assessment
of child support.
Relevant
dependent child amount
Under
the new scheme, all biological and adoptive children are to be treated as
equally as possible. Consequently, where a parent has a biological or adoptive
child living with them, who is not the subject of a child support assessment,
an amount is deducted from the parent’s adjusted taxable income to recognise
the parent’s costs for supporting this child. This amount is called the relevant
dependent child amount. In determining the costs of the relevant dependent
child, the parent’s income only is taken into account, not the income of a new
partner, as it is only the parent’s share of that child’s costs that need to be
deducted from their income.
The
method for calculating the relevant dependent child amount is set out in the
method statement in section 46 and is determined in accordance with the
following steps.
Step
1: work out the parent’s adjusted taxable income and the parent’s self‑support
amount.
Step
2: determine the percentage of care that the parent is likely to have of the
relevant dependent child during the next 12 months (see section 48). This
step recognises that, although the relevant dependent child is not a child who
is the subject of another child support assessment, they may be cared for part
of the time by another person. If so, the cost of this child to the parent
should be reduced to reflect that the parent does not meet the costs entirely.
Step
3: work out the parent’s cost percentage for the child (see section 55C).
Step
4: determine the costs of the child, in accordance with sections 55G and
55H, as if the parent’s annual rate of child support were assessed under
Subdivision D of Division 2, based on the income of the parent from
Step 1, and as if references to children in the child support case in
sections 55G and 55H were references to all of the parent’s relevant dependent
children. The reference to Subdivision D of Division 2 ensures that
subsection 55G(2) applies in working out the costs of the child, that is,
that the parent’s child support income alone is used to determine the costs
(not the income of their new partner or other parent).
Step
5: determine the relevant dependent child amount by using the following
formula:
The
operation of the formula in this step means that the cost of the relevant
dependent child to the parent is the proportion of the total costs of the child
that the parent bears through care of the child. If the parent has 100% care
of the child, their relevant dependent child amount is 100% of the costs of the
child. If the parent has, for example, 85% care of the child, their cost
percentage is 76% (worked out under section 55C) and they will be taken to
be meeting 76% of the child’s costs.
A
note at the end of the section points out that section 73A deals with the
situation where the Registrar discovers, after having made an assessment, that
the parent has a relevant dependent child.
Example 1 – Working out a parent’s relevant dependent
child amount
Johanna has a child support case for her daughter
Helga, and also has two relevant dependant children, Mitchell, aged 14, and
Frida, aged 11, in a new family. Mitchell and Frida live with Johanna and her
new partner 100% of the time.
When Johanna is assessed for child support, a
relevant dependent child amount is deducted from her income to recognise her
responsibility for Mitchell and Frida. Johanna’s adjusted taxable income is
$36,000.
Step 1:
Work out the difference between the parent’s adjusted taxable income and their
self-support amount. Johanna’s adjusted taxable income is $36 000 and her
self-support amount is $16,883, so the amount worked out under this step is
$19,117.
Step 2:
Work out the parent’s percentage of care for the relevant dependent children.
Mitchell and Frida live with Johanna full-time, so her percentage of care is
100%.
Step 3:
Work out the parent’s cost percentage for the relevant dependent children.
Johanna has 100% care of Mitchell and Frida so her cost percentage
is 100%.
Step 4: Work out the costs of the children as if
calculating the costs using sections 55G and 55H and as if
subsection 55G(2) applied, that is, using Johanna’s child support income
only. These sections say to calculate the cost by looking up the appropriate
item in the Costs of the Children Table to find the costs of all the children.
According to the Costs of the Children Table, the total cost of Mitchell and
Frida is $5,066, so the cost of each child is $2,533.
Step 5:
Work out the parent’s relevant dependent child amount by adding up the amount
for each child obtained by multiplying that child’s cost by the parent’s cost
percentage for that child. Johanna has a cost percentage of 100% for each
child, and the cost for each child is $2 533, giving an amount for each
child of $2,533. This makes Johanna’s relevant dependent child amount $5,066.
Multi-case
allowance (section 47) and multi-case cap (section 55E)
Some
parents have more than one child support case, that is, they have children with
more than one ex-partner. It is intended that no parent be expected to pay in
child support more than their children would cost if they all lived together in
one household with the parent, even if the children were born to different
ex-partners. The use of the income shares model to assess child support means
that this intention needs to be achieved using two separate mechanisms.
First,
the child support income that is used to calculate a parent’s child support
liability in each case is reduced by an amount, called a multi-case
allowance, to recognise the parent’s obligations to the children in their
other child support cases. Second, a multi-case cap is applied to the
parent’s liability in respect of each child for whom they are being assessed to
ensure they do not pay more in child support than if the children all lived
together. To ensure that children in multiple cases receive a fair amount of
child support, only one of these mechanisms operates for any one child, such
that where the multi-case cap applies for a child, the multi-case allowance is
not deducted from the parent’s income when calculating the multi‑case cap
for that child.
The
multi-case allowance is calculated by working out the costs of each of the
parent’s child support children based on their income alone, according to the
same Costs of the Children Table used to assess child support. This amount is
the multi-case child costs for each child. The total of the multi-case
child costs for all the children who are not in the particular child support
case being assessed becomes the parent’s multi-case allowance for the case
being assessed and is deducted from the parent’s adjusted taxable income for
this case. This reduction in the parent’s adjusted taxable income recognises
that the parent bears the costs of the other child support children either
through paying child support or through providing care, and that this income is
therefore not available when calculating child support for the children in this
case.
The
multi-case cap is the parent’s multi-case child costs for a particular
child less their cost percentage for that child. This is because the cap
recognises that the parent may be bearing some of the child’s cost through
regular or shared care, and this portion of the cost must be deducted from the
amount payable to find the appropriate child support amount, whereas the
multi-case allowance assesses the total cost. The parent will pay in child
support the lesser of the amount assessed under the formula for a particular
child and the multi-case cap. This ensures that the parent does not pay more
than the child would cost the parent if all the children lived in the parent’s
household.
The
method for calculating the multi-case allowance is set out in section 47
and is determined in accordance with the following steps.
Step
1: work out the parent’s adjusted taxable income and deduct from this the
self-support amount.
Step
2: if the parent has a relevant dependent child amount, deduct this amount
from the result in Step 1, to recognise the costs to the parent of this
dependent child. The amount determined from this step is the parent’s child
support income for calculating the costs of the multi-case children.
Step
3: determine the costs of all the children (called the multi-case children)
for whom the parent is assessed in all child support cases. This is calculated
using sections 55G and 55H. Step 3 works with the effect that only
the child support income of the parent being assessed for the multi‑case
allowance is relevant to determining the costs of the children and, also, as if
the references in sections 55G and 55H to children in a child support case
were references to all of the parent’s multi‑case children. The
multi-case allowance uses one parent’s income only because it is assessing only
that parent’s obligations to their child support children.
Step
4: work out the parent’s multi-case child cost for each child by dividing the
cost of the multi-case children worked out under Step 3 by the total number of
multi-case children. This result is the amount that each multi-case child
would cost on this parent’s income alone if they all lived in the parent’s
household.
Step
5: the parent’s multi-case allowance for a particular child in a child support
case is the product of the multi-case child costs from Step 4 and the number of
multi-case children in the parent’s other child support cases.
When
calculating the parent’s child support income for the purposes of assessing how
much they should pay in child support for a particular child, the amount of the
multi-case allowance is then deducted from the parent’s income. This has the
effect of deducting the costs of the children in the other child support cases
from the parent’s income when calculating child support for this particular
child. When child support is calculated for the other cases, the same process
applies, so that the cost of this first child is excluded from the parent’s
income when assessing the other cases.
Example - Working out multi-case
allowances
Ari has two child support cases, with two children,
Tara, aged 11, and Maya, aged 9, in one case, and one child, Aron, aged 5, in
the other case. He has 24% care of Tara and Maya, but less than 14% care of
Aron. Ari’s adjusted taxable income is $40,000, and he has no relevant
dependent children.
When calculating Ari’s child support for Tara and
Maya, Ari has a multi‑case allowance to recognise his responsibility for
Aron. When calculating Ari’s child support for Aron, Ari has a multi‑case
allowance to recognise his responsibility for Tara and Maya.
Calculating the multi-case costs of Tara, Maya, and
Aron
Step 1:
Work out Ari’s adjusted taxable income minus his self-support amount. Ari’s
adjusted taxable income is $40,000 and his self-support amount is $16,883, so
the amount worked out under this step is $23,117.
Step 2:
Ari has no relevant dependent children, so he has no relevant dependent child
amount.
Step 3:
Work out the costs of all the children (the multi-case children) for whom Ari
is assessed using sections 55G and 55H, as if he is being assessed for
child support on his income only (that is, as if subsection 55G(2)
applied) and as if references to children in a child support case were
references to all Ari’s multi‑case children.
Then, calculate the cost of the children by looking
up the appropriate item in the Costs of the Children Table to find the costs of
all the children. According to the Costs of the Children Table, the total cost
of Tara, Maya and Aron is $6,242.
Step 4:
Work out Ari’s multi-case child costs by dividing the cost of the children from
Step 3 by the total number of children. $6,242 divided by three gives a cost
per child of $2,081, which is the multi-case child costs for each child.
Calculating child support for Tara and Maya
Step 5:
When calculating Ari’s child support for Tara and Maya, Ari has a multi‑case
allowance to recognise his responsibility for Aron. This multi‑case
allowance is the multi‑case child costs from Step 4 multiplied by the
number of children in other child support cases. There is one child in another
child support case, Aron, so Ari’s multi‑case allowance when calculating
child support for Tara and Maya is $2,081 multiplied by 1, or $2,081.
Calculating child support for Aron
Step 6:
When calculating Ari’s child support for Aron, Ari has a multi‑case
allowance to recognise his responsibility for Tara and Maya. This multi‑case
allowance is the multi‑case child costs from Step 4 multiplied by the
number of children in other child support cases. There are two children in
another child support case, Tara and Maya, so Ari’s multi-case allowance when
calculating child support for Aron is $2,081 multiplied by 2, or $4,162.
Section
55E sets out how to work out the multi-case cap in respect of a particular
child. Subsection 55E(1) provides that the multi‑case cap is to be
used if the parent is to be assessed in another child support case, that is,
they have multiple child support cases, and either of the following applies:
- The
parent’s annual rate of child support for a particular child is to
be assessed under section 37 (Formula 3) or section 38
(Formula 4) and, in applying these formulas, the parent has a
positive child support percentage for that particular child under
Step 6 of the method statement in section 35.
- The
parent’s annual rate of child support for a particular child is to
be assessed under section 39 (Formula 5) or section 40
(Formula 6).
Subsection 55E(2)
provides that the multi‑case cap is to be worked out according to the
following formula:
The
multi-case cap for each child is the multi-case child costs for each child,
minus the costs that the parent bears directly through care (their cost
percentage). This is calculated by subtracting the parent’s cost percentage
from 100% (to determine the cost that they are not bearing directly) and
multiplying this percentage by the multi‑case child costs. The effect
of this is that the cap recognises that the parent may be bearing some of the
child’s cost through regular or shared care, and this portion of the cost must
be deducted from the cost to find the appropriate child support amount, whereas
the multi‑case allowance assesses the total cost. The parent will pay in
child support the lesser of the amount assessed under the formula for a
particular child and the multi‑case cap. This ensures that the parent
does not pay more than the child would cost if all the children lived in the
parent’s household.
Example
- Working out the multi-case cap
Using
the immediately preceding example, because Ari has more than one child support
case, the amount of child support that he can pay for each child is capped by
the multi-case cap.
This ensures that Ari does not bear a greater cost
for each child than he would if all the children were living with him. The
multi-case cap therefore takes account of costs that Ari bears directly through
care as well as the child support he pays.
The multi-case cap for each child is the multi-case
child costs for each child, minus the costs that Ari bears directly through
care. This is calculated by subtracting his cost percentage from 100% (to
determine the cost that he is not bearing directly) and multiplying this
percentage by the multi-case child costs. The multi-case child costs for each
child is worked out in section 47 and is $2,081 for each of Ari’s children
(see example immediately before this one).
Ari has 24% care of Tara and so has a 24% cost
percentage for her. Ari’s multi-case cap for Tara is therefore $2,081
multiplied by (100%‑24%), or $2,081 multiplied by 76%. This makes Ari’s
multi-case cap for Tara $1,582.
Ari has 24% care of Maya and so has a 24% cost
percentage for her. His multi-case cap for Maya is therefore $2,081 multiplied
by (100%‑24%), or $2,081 multiplied by 76%. This makes Ari’s multi-case
cap for Maya $1,582.
Ari has less than 14% care of Aron and so has a 0%
cost percentage for him. His multi-case cap for Aron is therefore $2,081
multiplied by (100%-0%), or $2,081 multiplied by 100%. This makes Ari’s multi‑case
cap for Aron $2,081.
Division 4 – Percentage of care
Division
4 deals with matters relating to the care a parent, or non‑parent carer,
provides for a child.
Division
4, Subdivision A – Simplified outline
Subdivision A
of Division 4 deals with preliminary matters for the Division.
Section 47A sets out a simplified outline of the Division. It provides
that a parent’s or non-parent carer’s percentage of care for a child for a day
in a child support period is the percentage of care of the child that the
person is likely to have during a 12 month period.
A
percentage of care for the child is as determined by an oral agreement or a
parenting plan made by the parents of the child (or a parent and a non-parent
carer), or by a court order.
The
Registrar can make a determination of a parent’s percentage of care for a child
in certain cases (such as if there is no such agreement, plan or order, or if
the care of the child changes).
A
parent’s percentage of care for a child is used in section 55C to work out
the parent’s cost percentage of the child.
A
non‑parent carer’s cost percentage for a child is used in
section 40A to work out how much child support the non-parent carer is
entitled to for the child.
Section 47B
provides that, for the purposes of this division, court order means one
of the following:
(a) a family violence order
within the meaning of section 4 of the Family Law Act; or
(b) a parenting order within the
meaning of section 64B of the Family Law Act; or
(c) a State child order
registered in accordance with section 70D of the Family Law Act; or
(d) an overseas child order
registered in accordance with section 70G of the Family Law Act.
Division
4, Subdivision B – Determining percentages of care
Subdivision B
of Division 4 deals with how to determine percentages of care for a care
period.
Percentage
of care
Section
48 provides that a person’s percentage of care for a day in a child support
period is the percentage of care of the child that the person is likely to have
for a child during a period of 12 months, called the care period.
Paragraph 48(1)(a) states that the care period will start from the day on
which an application for an assessment of child support is made (under section 25
or 25A). Alternatively, it may start on one of the following days:
- The
day the Registrar becomes aware of a change in care arrangements that
results in a change of at least 7.1%, that is, the equivalent of one night
per fortnight (subparagraph 48(1)(b)(i)). This threshold level of
change allows for minor fluctuations in the care arrangements (for
example, due to illness), which do not constitute a significant change to
the pattern of care.
- The
day the Registrar becomes aware of a change in care arrangements that
results in a parent either starting to have, or ceasing to have, 14% care
of the child (subparagraphs 48(1)(b)(ii) and (iii)). This rule
applies because, at this level of care, the parent is recognised as
meeting 24% of the costs of the child. However, if care is below 14%, the
parent is taken not to be incurring any costs for the child. It would be
inequitable to not recognise that these costs are incurred by the parent
as soon as they start to provide 14% care. Equally it would be inequitable
to assume that the parent continued to meet those costs when their care
fell below 14%.
The
change in care is measured in relation to the 12 months from the date the
Registrar is notified or becomes aware of the change.
A
note at the end of subsection 48(1) advises the reader that, by virtue of
subsection 75(2), the Registrar is not entitled to amend an administrative
assessment in respect of a person’s percentage of care unless the Registrar
become aware of an event mentioned in paragraph 48(1)(b). A further note
at the end of subsection 48(2) advises the reader that the Registrar will
generally rely on nights to calculate the percentage of care. However, this
will not always be the case. For example, where there is daytime care or a
mixture of daytime and night time care, the Registrar may take this into
account in determining the percentage of care.
Subsection 48(2)
provides that a person’s percentage of care is to be worked out in this
Subdivision B.
Subsection 48(3)
provides a rounding rule for percentage of care calculations. It states that
if a person’s percentage of care worked out in accordance with
Subdivision B is not a whole percentage, it is to be rounded up to the
nearest whole percentage if it is greater than 50% and rounded down to the
nearest whole percentage if it is less than 50%
Section 49
provides that, generally, the percentage of care, if any, that a parent or
non-parent carer is likely to have will be determined in accordance with the
care arrangements agreed between the parents or with a court order.
In
the situation where a non-parent carer has made an application against one
parent only (because, for example, the other parent is dead or a non-resident
of Australia), the percentage of care will be determined from an oral or
written agreement between the non‑parent carer and the parent, or a court
order (paragraph 49(a)). In all other cases, whether involving only the
parents or involving non-parent carers as well, the care arrangements, and
therefore the percentage of care, will be determined by an oral agreement
between the parents, a parenting plan or a court order, provided that whichever
is used contains sufficient information about the care arrangements to enable
such a determination to be made (paragraph 49(1)(b)).
If
there is no parenting plan or court order specifying the care levels, and the
parents have not come to an oral agreement for child support purposes, the
Registrar is required to make a factual determination of the percentage of care
each parent, or non-parent carer (if there is one) is likely to have, taking
into account such period of time as is necessary to be satisfied of a pattern
of care (see section 50). Subsection 50(2) provides that, in making this
determination, the Registrar must take into account such period of time as is
necessary to be satisfied that there is, has been or will be a pattern of care
for the child. For example, if a parent has had care of the children every 2nd
weekend for the past three months the Registrar can take this past period into
account in determining that the percentage of care that the parent is likely to
have during the next 12 months is based on the parent continuing to provide
this amount of care.
Subsection
50(3) enables the Registrar to revoke or vary a determination made under this
section.
Division
4, Subdivision C – Changes to percentages of care
Section
51 provides that where the most recent agreement between the parents is an oral
agreement, and one parent ceases to agree to the oral agreement, the Registrar
will revert to the most recent parenting plan or court order to determine the
percentage of care each parent is likely to have. If a parent disagrees with an
oral agreement and there is no previous parenting plan or court order, the
Registrar will make a factual determination as to the care arrangements.
For
example, the parents in a child support case enter into a parenting plan that
provides the first parent with 80% care and the other parent with 20% (regular
care). After six months, both parents advise the Child Support Agency that they
have agreed orally to change to shared care arrangements where they have an
equal care percentage. A year after the oral agreement is entered into, the
first parent advises the Child Support Agency that the other parent is not
exercising their care and the first parent no longer agrees to the shared care
arrangements. In this case, the Registrar would vary the care percentages in
the parents’ assessment to reflect the care percentages in the parenting plan.
The Registrar would vary the assessment immediately upon being advised that one
parent no longer agrees with the oral agreement. However, if one, or both,
parents disagrees with the care percentages under the parenting plan, the
Registrar can only vary the assessment with reference to section 52. Oral and
written agreements are treated differently because written agreements provide
clearer evidence of parents’ having made an agreement about future arrangements
for care.
Section 52
gives the Registrar a discretion to determine the percentage of care of a child
that a parent, or non-parent carer, is likely to have if the parent and/or
non-parent carer argues that the level of care that is actually occurring is
different from that specified in the agreement, parenting plan or court order
that was used (under section 49) to determine the parent’s, or non-parent
carer’s, percentage of care. The Registrar can determine that the parent or
non-parent carer’s percentage of care is different from that set out in the
agreement, parenting plan or court order provided that all the following
criteria are met:
- In
the circumstances of the case, the care percentage determined from the
existing agreement, parenting plan or court order that is used for the
calculation of child support, would be an unjust and inequitable
determination of the level of financial support to be provided by a parent
for the child (paragraph 52(1)(c)).
- At
least one of the parents, or the non-parent, has taken reasonable action
to seek agreement about the care arrangements for the child, or to seek or
enforce a court order dealing with care arrangements. What constitutes
reasonable action will depend on the particular circumstances of the case
and there may be some circumstances in which it is not reasonable for
parents to take action to seek agreement. However, reasonable action could
include, for example, attempting to resolve the matter through mediation
or counselling or seeking a new court order (paragraph 52(1)(d)).
- The
parent or non-parent carer of the child applies for the Registrar to make
this determination (paragraph 52(1)(e)).
Subsection 52(2)
requires the Registrar to consider such period of time as is necessary to be
satisfied that there is, has been, or will be, a particular pattern of care for
the child.
Subsection 52(3)
enables the Registrar to revoke or vary a determination made under
section 52 at any time.
If
the parents, or non-parent carer, have not resolved the conflict over the care
arrangements before the end of six months from when the Registrar makes a
determination under section 52, the Registrar must review the
determination and has the discretion to make another determination, provided
all the criteria in subsection 52(1) can still be satisfied
(subsection 52(4)). The reason for limiting these determinations to six
months is to reflect the principle of shared parental responsibility underlying
family law and child support, which is that parents should be encouraged to
agree about matters concerning their children, to take responsibility for their
parenting arrangements and seek to resolve conflict about parenting
arrangements. Ideally, the Registrar will not be required to determine care
arrangements beyond six months, rather the parents will resolve the issues and
reach agreement.
A
note at the end of subsection 52(1) advises the reader that if the
Registrar refuses to make a determination under this section, the Registrar
must give the applicant a notice under section 54.
Section
53 enables the Registrar to determine the percentage of care that a parent or
non‑parent carer is likely to have during a care period if one parent was
to have at least regular care of a child during the period and they did not
provide that level of care, despite the child being available to them. This
rule recognises that, given a parent gets a significant reduction in their
child support liability because they are credited with meeting the costs of a
child through regular care, they should not be entitled to the reduction if
they fail to provide care at that level. In this situation, the other parent,
or non-parent carer, is actually bearing the costs of the child and this should
be reflected in the assessment.
For example, a parent’s parenting plan may say they
have care of a child every second weekend. This means they have regular care
(expressed as a percentage of care of 14%) and are taken to be meeting 24% of
the costs of the child through this care, thereby reducing the amount they would
otherwise pay in child support. If, despite the parenting plan, the parent
stops caring for the child every fortnight, and their pattern of care becomes a
weekend every month, it would be inequitable for the parent to continue to get
a 24% reduction in their child support because they no longer bear significant
costs for the child through care.
Paragraph 53(1)(c)
requires that a parent must apply to the Registrar for a determination under
section 53 to be made.
A
note at the end of subsection 53(1) advises the reader that if the
Registrar refuses to make a determination under this section, the Registrar
must give the applicant a notice under section 54.
Subsections
53(2) and (3) provide that subsections 53(4) and (5) determine the date of
commencement of a determination under section 53 and that this date may be
retrospective, where appropriate.
Subsection 53(4)
states that the new determination of the percentage of care must be
prospective, that is, the day the determination is made or a future date.
Subsection 53(5) says the rule in subsection 53(4) will not apply if
the other parent, or non-parent carer, could not reasonably have known that
regular care was not occurring or would not occur. It would be reasonable for
a parent not to have known that regular care would not occur in the following
example.
Jack’s parenting plan with Emily, made in
March 2006, states that he will have Tommy for nine weeks over the
Christmas school holiday period. This agreed pattern of care gives Jack
regular care for the purposes of an assessment and so, in March 2006, when the
administrative assessment was made, Jack was given a 24% reduction in his child
support for this care. Jack tells Emily in November 2006 that he cannot care
for Tommy for the Christmas school holiday period due to his work commitments.
If Jack does not provide this care, he does not fulfil his obligation to
provide the percentage of care needed for regular care. Until
November 2006, Emily could not reasonably have known that Jack would not
provide this care over the Christmas break. In this situation, the Registrar
can determine that Jack never established a pattern of regular care that
justified the credit he received for regular care and can backdate, to
March 2006, a determination that sets Jack’s percentage of care to less
than regular care.
Subsection
53(6) makes it clear that a parent never establishes a pattern of care if the
pattern could not have been established until later in the child support
period, as occurred in the example of Jack and Emily.
Subsection
54(1) provides that if the Registrar refuses to make a determination under
section 52 or 53, the Registrar must serve written notice of the decision
on the person who made the application. Subsection 54(2) provides that
the notice must include, or be accompanied by, a statement to the effect that
the person may (subject to the Child Support Registration and Collection Act)
object to the particulars of the assessment and if the person is aggrieved by
the decision on objection, they can apply to the SSAT for review of the
decision.
Division
4, Subdivision D – Where there is more than one agreement, plan, order or
determination
Subsection
55(1) provides that if there is more than one oral agreement, parenting plan or
court order under section 49, or Registrar determination under section 50,
52 or 53, the percentage of care that a parent is likely to have during the
care period is to be determined by the most recent of the agreement, plan,
court order or determination. The purpose of this provision is to ensure that
parents reach agreement about care arrangements and adhere to the agreement
unless they agree otherwise. For example, if there is an oral agreement that
is later replaced by a parenting plan, and one of the parents then argues that
the level of care actually being provided is not what is provided for in the
plan and the (older) oral agreement more accurately reflects the care provided
by the other parent, the Registrar will not revert to basing the percentage of
care on the previous oral agreement (unless the parents both agree, in which
case there is a new oral agreement that takes precedence over the parenting
plan). If parents dispute the percentage of care actually occurring, they must
seek to resolve the matter and reach a new oral agreement or parenting plan, or
seek a court order. If the parents cannot agree and one parent applies to the
Registrar under section 52, the Registrar may make a factual determination of
the care arrangements if the criteria in section 52 are met.
Subsection 55(2)
provides that the most recent agreement, plan or determination is subject to
any court order made in respect of the parents of the child that specifies that
the order cannot be altered by agreement between the parents.
Division 5 – Working out other elements for the formulas
Division
5, Subdivision A – Simplified outline
Section 55A
sets out a simplified outline of other elements used in the formulas. It
provides that a parent’s income percentage represents:
- the
parent’s capacity to meet the costs of their child; and
- the
extent that the parent is taken to have met the costs of the child through
providing care for the child.
Section 55A
also provides that the parent’s child support percentage is the difference
between the parent’s income percentage and his or her cost percentage. If the
parent has a positive child support percentage, the annual rate of child
support payable by the parent is that percentage of the costs of the child. If
the parent has multiple child support cases, the annual rate of child support
payable by the parent is capped by the parent’s multi-case cap for the child.
Division
5, Subdivision B – Working out other elements for the formulas
Subdivision
B of Division 5 deals with how to work out other elements for the formulas,
including income percentages, cost percentages, child support percentages and
the multi-case cap.
Income
percentages
Section
55B sets out how to work out a parent’s income percentage for a day in the
child support period. Each parent’s percentage contribution to the combined
child support income is called their income percentage. Section 55B
provides that the formula for working out the parent’s income percentage is the
parent’s child support income divided by the combined child support income, as
follows:
This
formula works in the following way. If Jack’s child support income is $40,000
and Carla’s is $25,000, the combined child support income is $65,000. Jack’s
income percentage is $40,000 divided by $65,000, which is 61.54%. Carla’s
income percentage is $25,000 divided by $65,000, which is 38.46%.
In
determining the percentages, section 55B states that each percentage is
worked out to two decimal places, rounding up if the third decimal place is
five or more.
Cost
percentages
Section
55C sets out how to work out cost percentages. A parent’s or non‑parent
carer’s cost percentage for a child is the amount of credit, expressed as a
percentage, that the parent is given for providing care for a child. It is
worked out according to the table in section 55C, set out below.
|
Cost percentages
|
|
Item
|
Column 1
Percentage of care
|
Column 2
Cost percentage
|
|
1
|
0 to less than 14%
|
Nil
|
|
2
|
14% to less than 35%
|
24%
|
|
3
|
35% to less than 48%
|
25% plus 2% for each percentage point over 35%
|
|
4
|
48% to 52%
|
50%
|
|
5
|
more than 52% to 65%
|
51% plus 2% for each percentage point over 53%
|
|
6
|
more than 65% to 86%
|
76%
|
|
7
|
more than 86% to 100%
|
100%
|
Once
a parent’s or non-parent carer’s percentage of care is determined, this
percentage is translated into a cost percentage by identifying the relevant
percentage of care in column 1 of the table and then identifying the
corresponding row in column 2 to locate the appropriate cost percentage.
For example, if a parent has zero to less than 14%
care of a child (row 1, column 1) they have a cost percentage in
row 1, column 2 of nil. Consequently, this parent is taken not to be
incurring any costs for the child. Once a parent provides 14% care (row 2,
column 1), they have a cost percentage of 24% (row 2, column 2) and
are taken to be incurring 24% of the costs of the child. Similarly, a parent
who provides more than 86% care of a child (row 7, column 1) is taken
to be incurring 100% of the costs (row 7, column 2). In this latter
situation, the parent is taken to be incurring 100% of the costs because any
other care provided for the child must be less than 14%, and if a person
provides this amount of care they are taken not to be meeting any costs of the
child.
Child
support percentages
Section
55D sets out how to work out a parent’s child support percentage. A parent’s
child support percentage is used in the formulas to determine the proportion of
the costs of a child that a parent should transfer to the other parent or
carer, according to that parent’s share of the combined child support income
and costs borne through care. Each parent will have a child support
percentage, and section 55D provides it is calculated by deducting the
parent’s cost percentage (the credit they receive for their percentage of care)
from their income percentage (their proportion of the combined child support
income), as per the following formula.
The
calculation under this formula has the effect that the proportion of the costs
of the child that the parent is otherwise required to pay (their income
percentage) is reduced by the amount of care they provide for the child (their
cost percentage), recognising that they meet these costs through the care they
provide.
Multi‑case cap
Section
55E sets out how to work out a parent’s multi-case cap if the following
criteria apply (subsection 55E(1)):
·
a parent is to be assessed for
child support under Formula 3, 4, 5 or 6 (in sections 37, 38, 39 and 40); and
·
if Formula 3 or 4 (section 37
or 38), applies, the parent has a positive child support percentage for the
particular child under Step 6 of the method statement in Formula 1
(section 35); and
·
the parent is assessed in respect
of children in other child support cases.
Subsection
55E(2) provides that the parent’s multi-case cap for a child is worked out
using the formula:
This
works with the effect that the multi-case cap is the parent’s multi-case
child costs for a particular child less their cost percentage for that child.
This is explained more fully, with an example, in this explanatory memorandum
above under Division 3 under the heading Multi-case allowance
(section 47) and multi-case cap (section 55E).
Division 6 – The costs of the child
Division 6, Subdivision A - Preliminary
Subdivision
A of Division 6 sets out a simplified outline of the Division at
section 55F, which provides that the costs of children are worked out
using the rules in Division 6 as well as the Costs of the Children Table
in Schedule 1. The costs of the children are based on the number of
children in a child support case and the ages of those children. These costs
are divided by the number of children in the child support case to determine
the costs of the particular child. The Costs of the Children Table is updated
each year to reflect changes to the annualised MTAWE figure.
Division
6, Subdivision B – The costs of the child
Subdivision
B of Division 6 sets out how to use the Costs of the Children Table, which is
inserted as Schedule 1 to the Child Support Assessment Act by item 2
of this Schedule.
First,
it is necessary to identify the column in the Costs of the Children Table that
covers the parents’, or parent’s, relevant income range.
If
both parents are assessed for child support (that is, they are assessed under
section 35 (Formula 1), section 36 (Formula 2),
section 37 (Formula 3) or section 38 (Formula 4), the
relevant column is the one that covers the parents’ combined child support
income (subsection 55G(1)).
A
note at the end of subsection 55G(1) advises the reader that the Secretary
publishes the updated Costs of the Children Table in the Gazette each year for
child support periods that being in the next year (see section 155).
If only one parent is
assessed for child support (that is, they are assessed under section 39
(Formula 5) or section 40 (Formula 6), the relevant column is
the one that covers the parent’s child support income (subsection 55G(2)).
A note at the end of subsection 55G(2) alerts the reader to the fact that
this subsection also applies in working out the relevant dependent child amount
and the multi-case allowance (see Step 4 of the method statement in
section 46 and Step 3 of the method statement in section 47).
It
is then necessary to identify the number of children (the child support
children) in the child support case that relates to the child of the particular
assessment (subsection 55G(3)).
Next,
identify the ages of the child support children at the time the administrative
assessment is made. If there are more than three child support children in the
case, the ages of the oldest three children are to be used
(subsection 55G(4)).
Next,
identify the item in the Costs of the Children Table that covers that number of
child support children of those ages (subsection 55G(5)). The amount
worked out for the item is the costs of the children ((subsection 55G(6)).
Having
worked out the costs of the children, section 55H provides for how to work
out the costs of a child for a day. It provides that if there is only one
child support child, the costs of the child are the costs of the children
calculated under section 55G (paragraph 55H(a)). If there is more
than one child, the costs of the child is the costs of the children calculated
under section 55G, divided by the number of children in the child support
case (paragraph 55H(b)).
Division 2 - The formulas
Division
2, Subdivision B – Working out annual rates of child support using incomes of
both parents in single child support case
Section 35D
provides that Subdivision B of Part 5 is to be used to determine the
annual rate of child support payable where both parents are to be assessed in
respect of the costs of a child for whom they are both the parents and neither
of them has children in a different child support case. There are two
formulas in Subdivision B, as set out in section 35 (Formula 1)
and section 36 (Formula 2).
Formula 1 – two parents, single child support case, no non-parent carer
Section 35 sets out the method
statement to use to calculate the annual rate of child support payable for a
child for a day in a child support period if no non-parent carer has a
percentage of care for the child during the relevant care period. It comprises
the following steps.
Step
1 requires each parent’s child support income for the child for the day to be
worked out (see section 41).
Step
2 requires the parents’ combined child support income for the child for the day
to be worked out (see section 42).
Step
3 requires each parent’s income percentage for the child for the day to be
worked out (see section 55B).
Step
4 requires each parent’s percentage of care for the child to be worked out (see
sections 48).
Step
5 requires each parent’s cost percentage for the child for the day to be worked
out (see section 55C).
Step
6 requires each parent’s child support percentage to be worked out (see section
55D).
Step
7 requires the costs of the child for a day to be worked out (see
sections 55G and 55H).
Step
8 provides that if the parent has a positive child support percentage, under
step 6, the annual rate of child support payable by the parent for the
child for the day is worked out using the following formula:
The
formula works, therefore, by first establishing the income each parent has
available to contribute to the costs of their child. Combining both parents’
child support incomes pools the total resources available for meeting the
child’s costs and is also used to calculate the actual costs of the child,
because the costs of the child are based on how much parents have available to
spend on them. A parent’s child support percentage is the percentage that is
used to determine how much of the costs of a child the parent will be
responsible for. It is calculated by deducting the parent’s cost percentage
for the child from their income percentage. This has the effect that the
income the parent has available to support the child is reduced by the amount
of care they provide for the child, recognising that they meet these costs by
providing the care. If the parent is the main carer for the child, generally,
they will not have a positive child support percentage because their cost percentage
will be equal to or more than their income percentage. However, a note at the
end of section 35 makes it clear that, if a parent has a percentage of
care that is more than 65%, the parent’s rate of child support is nil (see
section 40C).
Where
a parent does have a positive child support percentage, they are required to
the pay the amount worked out by multiplying the child support percentage by
the costs of the child.
The
effect of this is that each parent will meet the costs of the child according
to their capacity to pay, after taking into account the costs they have met by
providing care.
Example 1 - Formula 1 - one parent with regular care
Joseph and Elly have three children, Paul, who is 9,
Jack, who is 7, and Kylie, who is 5. They separate, and the children live with
Elly most of the time, but spend every second weekend and some school holidays
with Joseph, as well as some evenings during the week.
Their care arrangements are flexible, but for all the
children Joseph’s care level amounts to regular care of between 14% and
34%. Joseph has an adjusted taxable income of $50,000 and Elly has an adjusted
taxable income of $30,000. Neither Joseph nor Elly has a relevant dependent
child.
Step 1: Work
out each parent’s child support income by deducting the self-support amount of
$16,883 from each of their incomes. This gives Joseph a combined child support
income of $33,117 and Elly a Child Support Income of $13,117.
Step 2: Work
out the parents’ combined child support income by adding together their child
support incomes. Joseph and Elly’s combined child support income is $33,117 +
$13,117, or $46,234.
Step 3: Work
out each parent’s income percentage by dividing their child support income by
their combined child support income from Step 2. For Joseph this is
$33,117 divided by $46,234, or 71.63%, and for Elly this is $13,117 divided by
$46,234, or 28.37%.
Step 4:
Work out the percentage of care that each parent will have of each child.
Joseph has between 14% and 34% care of Paul, Jack, and Kylie. Elly has between
66% and 86% care of Paul, Jack, and Kylie.
Step 5:
Work out each parent’s cost percentage for each child by looking up the table
in section 55C. Joseph has a cost percentage of 24% for Paul, Jack, and Kylie,
and Elly has a cost percentage of 76% for Paul, Jack, and Kylie.
Step 6:
Work out each parent’s child support percentage for each child by subtracting
their cost percentage for that child from their income percentage.
Joseph has a child support percentage of 71.63% – 24%
= 47.63% for Paul, Jack, and Kylie.
(This means that Joseph is
responsible for 71.63% of the children’s cost because he has 71.63% of the
combined child support income, but he bears 24% of the cost through care, so he
needs to transfer 47.63% of the cost to Elly through child support.)
Elly has a child support percentage of 28.37% – 76% =
–47.63% for Paul, Jack, and Kylie. This is taken to be nil, as it is negative.
(This means that Elly is
responsible for 28.37% of the children’s cost because she has 28.37% of the
combined child support income, and bears 76% of the cost through care, so she
is entitled to child support from Joseph.)
Step 7: Work out the costs of each child.
Joseph and Elly’s
combined child support income is $46,234 and, according to the Costs of the
Children Table, this makes the total cost of the children $12,274. This is
divided by three (the total number of children), giving a cost for each child
of $4,091.
Step 8:
If a parent has a positive child support percentage, this is the share of the
cost of the child that they need to transfer to the other parent.
As noted in Step 6, Joseph has a child support
percentage of 47.63% for Paul, Jack, and Kylie, and so needs to transfer 47.63%
of their costs to Elly through child support. The cost of each child is $4,091
and 47.63% of this is $1,949, so this is what Joseph owes in child support for
each child. The total that Joseph needs to transfer for Paul, Jack, and Kylie
is $5,847.
Elly has a nil child support percentage for Paul,
Jack, and Kylie, and so does not need to transfer any child support.
Joseph transfers $5,847 to Elly. He bears $2,946
(24% of the children’s cost) through care. Elly meets her share of the cost,
$3,481 (28.37% of the cost, since she has 28.37% of the combined child support
income) directly through care. She uses the child support from Joseph to meet
the remainder of the costs that she bears through care.
Example 2 - Formula 1- shared care, one child with
each parent
Peter and Amy have
two children, Jamie, who is 13, and Elissa, who is 9. They separate, and
Jamie lives with Peter 100% of the time and Elissa lives with Amy 100% of the
time. Peter has an adjusted taxable income of $40,000 and Amy has an adjusted
taxable income of $30,000. Neither Peter nor Amy has a relevant dependent
child.
Step 1: Work out each parent’s child
support income by deducting the self-support amount of $16,883 from each of
their incomes. This gives Peter a child support income of $23,117 and Amy a
child support income of $13,117.
Step 2: Work out the parents’ combined
child support income by adding together their child support incomes. Peter and
Amy’s combined child support income is $23,117 + $13,117, or $36,234.
Step 3: Work out each parent’s
income percentage by dividing their child support income by their combined
child support income from Step 2. For Peter this is $23,117 divided by
$36,234, or 63.80%, and for Amy this is $13,117 divided by $36,234, or 36.20%.
Step 4: Work out the percentage of
care that each parent will have of each child. Peter has 100% care of Jamie,
and Amy has 100% care of Elissa.
Step 5: Work out each parent’s cost
percentage for each child by looking up the table in section 55C. Peter has a
cost percentage of 100% for Jamie and 0% for Elissa, and Amy has a cost
percentage of 0% for Jamie and 100% for Elissa.
Step 6: Work out each parent’s child
support percentage for each child by subtracting their cost percentage for that
child from their income percentage.
Peter has a child
support percentage of 63.80% – 100% = –36.20% for Jamie. This is taken to be
nil, as it is negative.
(This means
that Peter is responsible for 63.80% of Jamie’s cost because he has 63.80% of
the combined child support income, but he bears 100% of Jamie’s cost through
care, so he is entitled to child support from Amy.)
Peter has a child
support percentage of 63.80% – 0 = 63.80% for Elissa.
(This means
that Peter is responsible for 63.80% of Elissa’s cost, and does not bear any of
the cost through care, so he needs to transfer 63.80% of the cost to Amy through
child support.)
Amy has a child
support percentage of 36.20% – 0 = 36.20% for Jamie.
(This means
that Amy is responsible for 36.20% of Jamie’s cost because she has 36.20% of
the combined child support income, and does not bear any of the cost through
care, so she needs to transfer 36.20% of the cost to Peter through child
support.)
Amy has a child
support percentage of 36.20% – 100% = –63.80% for Elissa. This is taken to be
nil, as it is negative.
(This means
that Amy is responsible for 36.20% of Elissa’s cost, but she bears 100% of the
cost through care, so she is entitled to child support from Peter.)
Step 7: Work out the costs of each
child. Peter and Amy’s combined child support income is $36,234 and, according
to the Costs of the Children Table, this makes the total cost of the children
$9,493. This is divided by two (the total number of children), giving a cost
for each child of $4,747.
Step 8: If a parent has a positive
child support percentage, this is the share of the cost of the child that they
need to transfer to the other parent.
As noted in Step
6, Peter has a nil child support percentage for Jamie, and so does not need to
transfer any child support for him (he is entitled to child support from Amy
for Jamie). Peter has a child support percentage of 63.80% for Elissa, and so
needs to transfer 63.80% of her costs to Amy through child support. Elissa’s
cost is $4,747 and 63.80% of this is $3,029, so this is what Peter owes in
child support for Elissa.
Amy has a child
support percentage of 36.20% for Jamie, so needs to transfer 36.20% of his
costs to Peter through child support. Jamie’s cost is $4,747 and 36.20% of
this is $1,718, so this is what Amy owes in child support for him. Amy has a
nil child support percentage for Elissa, and so does not need to transfer any
child support for her (she is getting child support from Jamie for Elissa).
The amount that
Peter needs to transfer to Amy ($3,029) and the amount that Amy needs to
transfer to Peter ($1,718) are offset, giving an amount of $1,311, which Peter
transfers to Amy.
Even though Peter and Amy each
have full care of a child, Peter has a higher income than Amy, and so there is
some child support payable to Amy.
Example 3 - Formula 1 - shared care and a relevant
dependant child
Tim and Wei Ling have two children, Jeremy, who is
15, and Alice, who is 13. Tim and Wei Ling have separated. Jeremy lives with
Tim most of the time, but spends every second weekend and some school holidays
with Wei Ling, so that Wei Ling has a care level of 24% for Jeremy and Tim has
76% care. Alice lives with Tim one week and Wei Ling the next, so that
they each have 50% care of Alice. Tim has an adjusted taxable income of
$40,000 and Wei Ling also has an adjusted taxable income of $40,000. Wei Ling
has a new relevant dependent child, who is 9.
Step 1: Work
out each parent’s child support income by deducting the self-support amount of
$16,883 from each of their incomes. Wei Ling has a relevant dependent child
amount that is also deducted from her income. This amount is worked out
according to section 47 and is $3,930. This gives Tim a child support
income of $23,117 and Wei Ling a child support income of $19,187.
Step 2: Work
out the parents’ combined child support income by adding together their child
support incomes. Tim and Wei Ling’s combined child support income is $23,117 +
$19,187, or $42,304.
Step 3:
Work out each parent’s income percentage by dividing their child support income
by their combined child support income from step 2. For Tim this is
$23,117 divided by $42,304, or 54.64%, and for Wei Ling this is $19,187 divided
by $42,304, or 45.36%.
Step 4:
Work out the percentage of care that each parent will have of each child. Tim
has 76% care of Jeremy and 50% care of Alice. Wei Ling has 24% care of
Jeremy and 50% care of Alice.
Step 5:
Work out each parent’s cost percentage for each child by looking up the table
in section 55C. Tim has a cost percentage of 76% for Jeremy and 50% for Alice,
and Wei Ling has a cost percentage of 24% for Jeremy and 50% for Alice.
Step 6:
Work out each parent’s child support percentage for each child by subtracting
their cost percentage for that child from their income percentage.
Tim has a child support percentage of 54.64% – 76% =
–21.36% for Jeremy. This is taken to be nil, as it is negative.
(This means that Tim is
responsible for 54.64% of Jeremy’s cost because he has 54.64% of the combined
child support income, and he bears 76% of the cost through care, so he is
entitled to child support from Wei Ling.)
Tim has a child support percentage of 54.64% – 50% =
4.64% for Alice.
(This means that Tim is
responsible for 54.64% of Alice’s cost because he has 54.64% of the combined
child support income, and he bears 50% of the cost through care, so he needs to
transfer 4.64% of the cost to Wei Ling through child support.)
Wei Ling has a child support percentage of 45.36% –
24%, or 21.36% for Jeremy.
(This means that Wei Ling is
responsible for 45.36% of Jeremy’s cost because she has 45.36% of the combined
child support income, and bears 24% of the cost through care, so she needs to
transfer 21.36% of the cost to Tim through child support.)
Wei Ling has a child support percentage of 45.36% –
50%, or –4.64% for Alice. This is taken to be nil, as it is negative.
(This means that Wei Ling is
responsible for 45.36% of Alice’s cost because she has 45.36% of the combined
child support income, and bears 50% of the cost through care, so she is
entitled to child support from Tim.)
Step 7:
Work out the costs of each child.
Tim and Wei Ling’s combined child support income is
$42,304 and, according to the Costs of the Children Table, this makes the total
cost of the children $12,098. This is divided by two (the total number of
children), giving a cost for each child of $6,049.
Step 8:
If a parent has a positive child support percentage, this is the share of the
cost of the child that they need to transfer to the other parent.
As noted in Step 6, Tim has a nil child support
percentage for Jeremy and so does not need to transfer any child support for
him – he is getting child support from Wei Ling for Jeremy.
Tim has a child support percentage of 4.64% for
Alice, so he needs to transfer 4.64% of Alice’s cost to Wei Ling through child
support. Alice’s cost is $6,049 and 4.64% of this is $280, so this is what Tim
owes in child support for Alice.
Wei Ling has a child support percentage of 21.36% for
Jeremy, so she needs to transfer 21.36% of Jeremy’s cost to Tim through child
support. Jeremy’s cost is $6,049 and 21.36% of this is $1,292, so this is what
Wei Ling owes in child support for Jeremy.
Wei Ling has a nil child support percentage for
Alice, and so does not need to transfer any child support for her – she is
getting child support from Tim for Alice.
The amount that Tim needs to transfer to Wei Ling ($280)
and the amount that Wei Ling needs to transfer to Tim ($1,292) are offset
(under section 67A), giving an amount of $1,012, which Wei Ling transfers
to Tim.
Formula 2 - two
parents, single child support case, one or more non-parent carers
Subsection 36(1) states that
section 36 sets out how to calculate the annual rate of child support
payable for a child for a day in a child support period if a non-parent carer
has a percentage of care for a child for a day in the child support period (Formula 2)
Initially,
Formula 2 applies in exactly the same way as Formula 1. This is because,
if a non-parent carer is providing care, the assessment is still worked out
using both parents’ incomes, cost percentages and child support percentages.
The only information about the non-parent carer that is relevant to the
assessment is their cost percentage (based on their percentage of care). It is
only the manner in which each parent’s annual rate of child support payable is
distributed that differs from Formula 1, as part of the child support
needs to be paid to the non‑parent carer to contribute to their costs for
caring for the child.
Consequently,
subsection 36(2) requires Steps 1 to 8 of Formula 1 to be followed except
that the rule in subsection 55D(2), which states that a parent’s child support
percentage is to be disregarded if it is negative, is ignored.
Subsection
36(3) then provides that if the first parent’s child support percentage under
Step 6 of the method statement in Formula 1 is positive, the annual rate of
child support payable by the first parent for the child is the annual rate
worked out under Step 8 of the method statement in Formula 1.
Subsection
36(4) states the rule for when an annual rate of child support for a child is
payable only to a non-parent carer or carers. It provides that if the second
parent’s child support percentage is also positive, the first parent must pay
the annual rate of child support worked out under Step 8 of Formula 1
to the non‑parent carer. Similarly, if the second parent’s child support
percentage is negative, but they do not have at least shared care of the child,
the first parent must pay the annual rate of child support payable under Step 8
of Formula 1 to the non-parent carer. This is because the second parent
is not entitled to any child support unless they have at least shared care of
the child.
Section
40A sets out how to distribute a parent’s annual rate of child support if there
is more than one non-parent carer (see Division 2, Subdivision E
below).
Note 1
at the end of subsection 36(4) points out that if both parents have a
positive child support percentage, the non-parent carer or carers are entitled
to be paid the total of the two annual rates of child support.
A
further note, Note 2, points out that a non-parent carer is not entitled to be
paid child support unless they make an application under section 25A in
relation to the child. This is because subsection 40B(2) requires a non‑parent
carer to apply for an assessment if they want to be paid child support in
respect of a child.
Subsection 36(5)
deals with how an annual rate of child support is to be distributed if it is
payable to both the other parent and a non-parent carer.
Paragraph 36(5)(a) provides that if the second’s parent’s child support
percentage is negative and the second parent has at least shared care of the
child, the first parent must pay the annual rate of child support payable under
Step 8 of Formula 1 to the second parent using the second parent’s
negative child support percentage as a positive. For example, if Betty, the
second parent, has a child support percentage of –35%, it is taken to be 35%,
and she is entitled to be paid 35% of the first parent’s annual rate of child
support.
Providing
the non-parent carer has applied to be paid child support,
paragraph 36(5)(b) then requires the non-parent carer to be paid the
difference between the annual rate payable by the first parent and the amount paid
to the second parent. In the example above, Betty is entitled to 35% of the
first parent’s annual rate of child support for the child, so the non-parent
carer would be entitled to the remaining 65%. (Note that this method of
distribution does not apply if the first parent’s annual rate of child support
for the child is determined by the multi-case cap (see section 55E)).
Example 1 - Formula 2 - one non-parent carer, one
parent with care
Ben and Jacki have two children, Tom, who is 4, and
Shona, who is 2. They separate, and Tom and Shona live with Ben’s mother,
Lisa, most of the time, but Ben has regular care of 24% of Tom. Jacki has less
than 14% care of both children. Ben has an adjusted taxable income of $45,000
and Jacki has an adjusted taxable income of $25,000. Neither Ben nor Jacki has
a relevant dependent child.
Step 1: Work
out each parent’s child support income by deducting the self-support amount of
$16,883 from each of their incomes. This gives Ben a child support income of
$28,117 and Jacki a child support income of $8,117.
Step 2: Work
out the parents’ combined child support income by adding together their child
support incomes. Ben and Jacki’s combined child support income is $28,117 +
$8,117, or $36,234.
Step 3:
Work out each parent’s income percentage by dividing their child support income
by their combined child support income from Step 2. For Ben this is
$28,117 divided by $36,234, or 77.60%, and for Jacki this is $8,117 divided by
$36,234, or 22.40%.
Step 4:
Work out the percentage of care that each parent or non‑parent carer will
have of each child. Ben has 24% care of Tom, and Lisa has 76% care of Tom and
100% care of Shona. Jacki does not have any care of the children.
Step 5:
Work out each parent and non-parent carer’s cost percentage for each child by
looking up the table in section 55C. Ben has a cost percentage of 24% for Tom
and 0% for Shona, Jacki has a cost percentage of 0% for Tom and Shona, and Lisa
has a cost percentage of 76% for Tom and 100% for Shona.
Step 6:
Work out each parent’s child support percentage for each child by subtracting
their cost percentage for that child from their income percentage.
Ben has a child support percentage of 77.60% – 24% =
53.60% for Tom.
(This means that Ben is
responsible for 77.60% of Tom’s cost because he has 77.60% of the child support
income, but he bears 24% of Tom’s cost through care, so he needs to transfer
53.60% of Tom’s cost through child support.)
Ben has a child support percentage of 77.60% – 0 =
77.60% for Shona.
(This means that Ben is
responsible for 77.60% of Tom’s cost, and does not bear any of the cost through
care, so he needs to transfer 77.60% of Shona’s cost through child support.)
Jacki has a child support percentage of 22.40% – 0 =
22.40% for Tom.
(This means that Jacki is
responsible for 22.40% of Tom’s cost because she has 22.40% of the child
support income, and does not bear any of the cost through care, so she needs to
transfer 22.40% of the cost through child support.)
Jacki has a child support percentage of 22.40% – 0 =
22.40% for Shona.
(This means that Jacki is
responsible for 22.40% of Shona’s cost because she has 22.40% of the child
support income, and does not bear any of the cost through care, so she needs to
transfer 22.40% of the cost through child support.)
Note that Lisa does not have a child support
percentage because, although she is bearing some of the costs of the children,
she has no legal obligation to financially support them, and therefore her
income is not used in the child support calculation.
Step 7:
Work out the costs of each child.
Ben and Jacki’s combined child support income is
$36,234 and, according to the Costs of the Children Table, this makes the total
cost of the children $8,587. This is divided by two (the total number of
children), giving a cost for each child of $4,294.
Step 8:
If a parent has a positive child support percentage, this is the share of the
cost of the child that they need to transfer in child support.
As noted in Step 6, Ben has a child support
percentage of 53.60% for Tom, and so needs to transfer 53.60% of his costs
through child support. Tom’s cost is $4,294 and 53.60% of this is $2,302, so
this is what Ben owes in child support for Tom.
Ben has a child support percentage of 77.60% for
Shona, and so needs to transfer 77.60% of her costs through child support.
Shona’s cost is $4,294 and 77.60% of this is $3,332, so this is what Ben owes
in child support for Shona.
Jacki has a child support percentage of 22.40% for
Tom, and so needs to transfer 22.40% of his costs through child support. Tom’s
cost is $4,294 and 22.40% of this is $962, so this is what Jacki owes in child
support for Tom.
Jacki has a child support percentage of 22.40% for Shona,
and so needs to transfer 22.40% of her costs through child support. Shona’s
cost is $4,294 and 22.40% of this is $962, so this is what Jacki owes in child
support for Shona.
Step 9:
If both parents’ child support percentages are positive, then the non-parent
carer is entitled to be paid the total of the child support from both parents.
Both Ben and Jacki have positive child support
percentages for both children. Ben pays $2,303 for Tom and $2,332, or a total
of $5,634 to Lisa. Jacki pays $962 for Tom and $962 for Shona, or a total of
$1,924 to Lisa.
Step 10: There
is only one non-parent carer, Lisa, so she receives all of the child support,
that is, $7,558.
Example 2 - Formula 2 - two non-parent carers, one
parent with care
Jeff and Kathy have one child, Trent, who is 12.
They separate, and neither Jeff nor Kathy can look after Trent full-time.
Trent lives 46% of the time with Jeff’s mother, Irene, and 40% of the time with
Kathy’s mother, Jan. Jeff has 14% care of Trent and Kathy has less than
14% care of Trent. Jeff has an adjusted taxable income of $45,000 and
Kathy has an adjusted taxable income of $25,000. Neither Jeff nor Kathy has a
relevant dependent child.
Step 1: Work
out each parent’s child support income by deducting the self-support amount of
$16,883 from each of their incomes. This gives Jeff a child support income of
$28,117 and Kathy a child support income of $8,117.
Step 2: Work
out the parents’ combined child support income by adding together their child
support incomes. Jeff and Kathy’s combined child support income is $28,117 +
$8,117, or $36,234.
Step 3:
Work out each parent’s income percentage by dividing their child support income
by their combined child support income from step 2. For Jeff this is
$28,117 divided by $36,234, or 77.60%, and for Kathy this is $8,117 divided by
$36,234, or 22.40%.
Step 4:
Work out the percentage of care that each parent or non‑parent carer will
have of each child. Jeff has 14% care of Trent, Irene has 46% care of Trent,
and Jan has 40% care of Trent. Kathy does not have any care of Trent.
Step 5:
Work out each parent’s cost percentage for each child by looking up the table
in section 55C. Jeff has a cost percentage of 24%, because he has regular care
of 14–34%. Kathy has a cost percentage of 0%.
Step 6:
Work out each parent’s child support percentage for each child by subtracting
their cost percentage for that child from their income percentage.
Jeff has a child support percentage of 77.60% – 24% =
53.60%.
(This means that Jeff is
responsible for 77.60% of Trent’s cost because he has 77.60% of the child
support income, but he bears 24% of Trent’s cost through care, so he needs to
transfer 53.60% of Trent’s cost through child support.)
Kathy has a child support percentage of
22.40% – 0 = 22.40% for Trent.
(This means
that Kathy is responsible for 22.40% of Trent’s cost because she has 22.40% of
the child support income, and does not bear any of the cost through care, so
she needs to transfer 22.40% of the cost through child support.)
Note that Irene and Jan do not have child support
percentages because, although they are bearing some of Trent’s costs, they have
no legal obligation to financially support him, and therefore their incomes are
not used in the child support calculation.
Step 7:
Work out the costs of the child.
Jeff and Kathy’s combined child support income is
$36,234 and, according to the Costs of the Children Table, this makes Trent’s
cost $5,942.
Step 8:
If a parent has a positive child support percentage, this is the share of the
cost of the child that they need to transfer in child support.
As noted in Step 6, Jeff has a child support
percentage of 53.60%, and so needs to transfer 53.60% of Trent’s costs through
child support. Trent’s cost is $5,942 and 53.60% of this is $3,185, so this is
what Jeff owes in child support for Trent.
Kathy has a child support percentage of 22.40% for
Trent, and so needs to transfer 22.40% of his costs through child support.
Trent’s cost is $5,942 and 22.40% of this is $1,331, so this is what Kathy owes
in child support for Trent.
Step 9:
If both parents’ child support percentages are positive, then the non-parent
carers are entitled to be paid the total of the child support from both
parents.
Both Jeff and Kathy have positive child support
percentages. Jeff pays $3,185 and Kathy pays $1,331. This is a total of
$4,516.
Step 10: Divide
the child support between the eligible parents and non‑parent carers
according to their share of the cost percentages of all people eligible to
receive child support (section 40A).
Jeff has a cost percentage of 24% (for care of
14-34%), but because he has less than 35% care, he is not eligible to receive
child support.
Kathy has a cost percentage of 0%. Irene has a cost
percentage of 35% (25% for 35% care + 2% for each percentage of care over 35%)
and Jan has a cost percentage of 47% (25% for 35% care + 2% for each percentage
of care over 35%), so the child support is divided between Irene and Jan.
The total of the cost percentages of the people
entitled to receive child support is 35% + 47% = 82%. Irene’s cost percentage
divided by the cost percentages of the people entitled to receive child support
is therefore 35% divided by 82%, or 42.68%. Jan’s cost percentage divided by
the cost percentages of the people entitled to receive child support is
therefore 47% divided by 82%, or 57.31%
The total available child support is $4,516 and Irene
is entitled to 42.68% of this. Irene receives $1,927. Jan is entitled to
57.31% of the child support, and receives $2,588.
Example 3 - Formula 2 - one non-parent carer, one
parent with shared care
Sean and Tricia have one child, Sarah, who is 7.
They separate, and Sarah lives 50% of the time with Tricia and 50% of the time
with Tricia’s mother, Dorothy. Sean has an adjusted taxable income of $65,000
and Tricia has an adjusted taxable income of $45,000. Neither Sean nor Tricia
has a relevant dependent child.
Step 1: Work
out each parent’s child support income by deducting the self-support amount of
$16,883 from each of their incomes. This gives Sean a child support income of
$48,117 and Tricia a child support income of $28,117.
Step 2: Work
out the parents’ combined child support income by adding together their child
support incomes. Sean and Tricia’s combined child support income is $48,117 +
$28,117, or $76,234.
Step 3:
Work out each parent’s income percentage by dividing their child support income
by their combined child support income from Step 2. For Sean this is
$48,117 divided by $76,234, or 63.12%, and for Tricia this is $28,117 divided
by $76,234, or 36.88%.
Step 4:
Work out the percentage of care that each parent or non‑parent carer will
have of each child. Tricia has 50% care of Sarah and Dorothy has 50% care of
Sarah. Sean does not have any care of Sarah.
Step 5:
Work out each parent’s cost percentage for each child by looking up the table
in section 55C. Tricia has a cost percentage of 50%, because she has shared
care of 50%. Sean has a cost percentage of 0%.
Step 6:
Work out each parent’s child support percentage for each child by subtracting
their cost percentage for that child from their income percentage.
Sean has a child support percentage of
63.12% – 0% = 63.12%.
(This means
that Sean is responsible for 63.12% of Sarah’s cost because he has 63.12% of
the child support income, and does not bear any of the cost through care, so he
needs to transfer 63.12% of Sarah’s cost through child support.)
Tricia has a child support percentage of 36.88% – 50%
= –13.12% for Trent.
(This means that Tricia is
responsible for 36.88% of Sarah’s cost because she has 36.88% of child support
income, but she bears 50% of the cost through care, so she is entitled to
13.12% of the cost through child support.)
Note that Dorothy does not have a child support
percentage because, although she is bearing some of Sarah’s costs, she has no
legal obligation to financially support her, and therefore her income is not
used in the child support calculation.
Step 7:
Work out the costs of the child.
Sean and Tricia’s combined child support income is
$76,234 and, according to the Costs of the Children Table, this makes Sarah’s
cost $11,169.
Step 8:
If a parent has a positive child support percentage, this is the share of the
cost of the child that they need to transfer in child support.
As noted in Step 6, Sean has a child support
percentage of 63.12%, and so needs to transfer 63.12% of Sarah’s costs through
child support. Sarah’s cost is $11,169 and 63.12% of this is $7,050, so this
is what Sean owes in child support for Sarah.
If the second parent has a negative child support
percentage, and that parent has at least shared care, that parent is entitled
to that percentage, expressed as a positive, of the costs of the child.
Tricia has a child support percentage of –13.12% for
Sarah, and has shared care of her. Tricia is therefore entitled to 13.12% of
Sarah’s cost. 13.12% of $11,169 is $1,465, and this is what Sean pays to
Tricia in child support. Tricia also meets 36.88% of Sarah’s costs directly
through care, as she has 36.88% of the combined child support income.
The non-parent carer is entitled to the remainder of
the child support payable. $7,050 – $1,465 = $5,585, and this is what Sean
pays to Dorothy in child support. This is 50% of the cost of Sarah.
Division 2, Subdivision C – Working out annual rates
of child support using the incomes of both parents in multiple child support
cases
Section 36A
provides that Subdivision C of Division 2 of Part 5 is to be used to
determine the annual rate of child support payable for a child a day in the
child support period if both parents are to be assessed in respect of the costs
of that child and at least one of the parents is to be assessed in respect of
the costs of another child in another child support case. There are two formulas in
Subdivision C, as set out in section 37 (Formula 3) and section
38 (Formula 4).
Formula 3 – two parents, multiple child support case, no non-parent
carer
Section
37 sets out the method statement for working out the annual rate of child
support payable where at least one parent has more than one child support case
and no non-parent carer has a percentage of care for the child for a day in the
child support period.
The
method statement has three steps.
Step
1 requires Steps 1 to 8 of section 35 (Formula 1) to be followed.
Step
2 then requires that each parent’s multi-case cap (if any) be calculated in
accordance with section 55E.
Step
3 then provides that if a parent has a positive child support percentage under
Step 6 of the method statement in section 35 (Formula 1), the
annual rate of child support payable by the parent for the child is the lesser
of the annual rate of child support worked out under Step 8 of
section 35 (Formula 1) and the parent’s multi‑case cap for the
child.
Essentially,
this Formula 3 works in exactly the same way as Formula 1, except
that it ensures that no parent will pay in child support more than their
children would cost if they all lived together in one household, even if the
children were born to different ex-partners. It does this by ensuring that a
parent with multiple child support cases will pay no more in child support than
their multi-case cap (the amount the children would cost if they all lived in
one household).
Example - Formula 3 - parent with multiple cases
Belinda and George have one child Hugo, who is 3.
George also has a child, Lucy, who is 9, with Stella. Hugo lives with Belinda
most of the time, and George has less than 14% care. Lucy lives one week with
George and the next week with Stella, so that each has 50% care. Belinda has
an adjusted taxable income of $30,000, George has an adjusted taxable income of
$40,000, and Stella has an adjusted taxable income of $35,000. There are no
relevant dependent children.
Child Support for Hugo
Step 1: Work
out each parent’s child support income by deducting the self-support amount of
$16,883 from each of their incomes, and the multi-case allowance, if
necessary. George’s multi-case allowance (which recognises George’s obligation
to Lucy) is $2,774 (see section 47). This gives George a child support
income of $20,343 and Belinda a child support income of $13,117.
Step 2: Work
out the parents’ combined child support income by adding together their child
support incomes. George and Belinda’s combined child support income is $20,343
+ $13,117, or $33,460.
Step 3:
Work out each parent’s income percentage by dividing their child support income
by their combined child support income from Step 2. For George this is
$20,343 divided by $33,460, or 60.80%, and for Belinda this is $13,117 divided
by $33,460, or 39.20%.
Step 4:
Work out the percentage of care that each parent will have of each child.
George has care of less than 14% of Hugo, so Belinda has 100% care of Hugo.
Step 5:
Work out each parent’s cost percentage for each child by looking up the table
in section 55C. George has a cost percentage of 0% and Belinda has a cost
percentage of 100%.
Step 6:
Work out each parent’s child support percentage for each child by subtracting
their cost percentage for that child from their income percentage.
George has a child support percentage of 60.80% – 0%
= 60.80% for Hugo.
(This means that George is
responsible for 60.80% of Hugo’s cost, and does not bear any of the cost
through care, so he needs to transfer 60.80% of the cost to Belinda through
child support.)
Belinda has a child support percentage of 39.20% –
100% = –39.20%. This is taken to be nil, as it is negative.
(This means that Belinda is
responsible for 39.20% of Hugo’s cost because she has 39.20% of the child
support income, but she bears 100% of the cost through care, so she is entitled
to child support from George.)
Step 7:
Work out the costs of each child. Belinda and George’s combined child support
income is $33,460 and, according to the Costs of the Children Table, this makes
Hugo’s cost $5,525.
Step 8:
If a parent has a positive child support percentage, this is the share of the
cost of the child that they need to transfer to the other parent.
George has a child support percentage of 60.80% for
Hugo, so needs to transfer 60.80% of his costs to Belinda through child
support. Hugo’s cost is $5,525 and 60.80% of this is $3,359, so this is what
George owes in child support for him (subject to the operation of the
multi-case cap in Step 9).
Belinda has a nil child support percentage for Hugo,
and so does not need to transfer any child support for him (she is entitled to
child support from George for Hugo).
Work out each parent’s multi-case cap, if any.
George’s multi‑case cap for Hugo is $2,774 (see section 55E).
Amanda only has one child support case, so does not have a multi-case cap.
Step 9:
The amount that George must pay in child support to Belinda is the lesser of
the amounts in Step 7 and Step 8. $2,774 is the lesser of the two amounts, so
this is what George pays to Belinda in child support. This is the amount that
it would cost George to look after Hugo if he was living with George and any
other child support children that George has (that is, Lucy).
Child Support for Lucy
Step 1: Work
out each parent’s child support income by deducting the self-support amount of
$16,883 from each of their incomes, and the multi-case allowance, if
necessary. George’s multi-case allowance (which recognises George’s obligation
to Hugo) is $2,774 (see section 47). This gives George a child support
income of $20,343 and Stella a child support income of $18,117.
Step 2: Work
out the parents’ combined child support income by adding together their child
support incomes. George and Stella’s combined child support income is $20,343
+ $18,117, or $38,460.
Step 3:
Work out each parent’s income percentage by dividing their child support income
by their combined child support income from Step 2. For George this is
$20,343 divided by $38,460, or 52.89%, and for Stella this is $18,117 divided
by $38,460, or 47.11%.
Step 4:
Work out the percentage of care that each parent will have of each child.
George and Stella both have 50% care of Lucy.
Step 5:
Work out each parent’s cost percentage for each child by looking up the table
in section 55C. George has a cost percentage of 50% and Stella has a cost
percentage of 50%.
Step 6:
Work out each parent’s child support percentage for each child by subtracting
their cost percentage for that child from their income percentage.
George has a child support percentage of
52.89% – 50% = 2.98% for Lucy.
(This means
that George is responsible for 52.89% of Lucy’s cost because he has 52.89% of
the combined child support income, and bears 50% of the cost through care, so
he needs to transfer 2.89% of the cost to Stella through child support.)
Stella has a child support percentage of 47.11% – 50%
= –2.89%. This is taken to be nil, as it is negative.
(This means that Stella is
responsible for 47.11% of Lucy’s cost because she has 47.11% of the combined
child support income, but she bears 50% of the cost through care, so she is
entitled to child support from George.)
Step 7:
Work out the costs of each child.
Stella and George’s combined child support income is
$38,460 and, according to the Costs of the Children Table, this makes Lucy’s
cost $6,275.
Step 8:
If a parent has a positive child support percentage, this is the share of the
cost of the child that they need to transfer to the other parent.
George has a child support percentage of 2.89% for
Lucy, so needs to transfer 2.89% of his costs to Stella through child support. Lucy’s
cost is $6,275 and 2.89% of this is $181, so this is what George owes in child
support for her (subject to the operation of the multi-case cap in Step 9).
Stella has a nil child support percentage for Lucy,
and so does not need to transfer any child support for her (she is entitled to
child support from George for Lucy).
Step 9:
Work out each parent’s multi-case cap, if any. George’s multi‑case cap
for Hugo is $1,387 (see section 55E). Stella only has one child support
case, so does not have a multi-case cap.
Step 10:
The amount that George must pay in child support to Belinda is the lesser of
the amounts in Step 7 and Step 8. $181 is the lesser of the two amounts, so
this is what George pays to Stella in child support. Even though George and
Stella both have 50% care of Lucy, George has a slightly higher child support
income than Stella, so transfers a small amount of child support for Lucy.
Formula 4 – two parents, multiple child support cases, non-parent carer
Subsection 38(1) states that
section 38 sets out how to calculate the annual rate of child support
payable for a child for a day in a child support period if a non-parent carer
has a percentage of care for a child for a day in the child support period
(Formula 4).
Subsection 38(2)
requires Steps 1 to 8 in section 35 (Formula 1) to be followed except that
the rule in subsection 55D(2), which states that a parent’s child support
percentage is to be disregarded if it is negative, is to be ignored.
Subsection 38(3)
then requires that each parent’s multi-case cap (if any) be calculated in
accordance with section 55E.
Subsection
38(4) provides that if a parent’s (the first parent’s) child support percentage
under Step 6 of the method statement in section 35 (Formula 1)
is positive, then the annual rate of child support payable by the parent for
the child is the lower of:
- the
annual rate of child support worked out under Step 8 of the method
statement; and
- the
parent’s multi-case cap (if any) for the child.
Subsection 38(5)
provides for how to pay the annual rate if it is only payable to non-parent
carers. It provides that if the second parent’s child support percentage is
also positive, or the second parent’s child support percentage is nil or negative,
but the parent does not have shared care of the child, then the first parent
must pay the annual rate of child support that is payable by them under
subsection 38(4) to the non‑parent carers in accordance with
section 40A.
Subsection 38(6)
sets out how to distribute a parent’s annual rate of child support if it is
payable to both the other parent and a non-parent carer. Subsection 38(6)
provides that if the second parent’s child support income is negative, and the
second parent has at least shared care of the child, then, subject to
section 40B, the first parent must pay the annual rate of child support
that is payable by the first parent for the child under subsection 38(4)
to the second parent and the non‑parent carer in accordance with
section 40A.
Example - Formula 4 - multiple cases, with a
non-parent carer
Marina and Pablo have one child, Elena, who is 14.
Pablo also has two children with Tessa – Bella, who is 9, and Charlie, who is
6. Elena lives with Maria most of the time, and Pablo has 24% care. Bella and
Charlie live one week with Tessa and the next week with Tessa’s mother,
Eleanor, so that each has 50% care. Pablo has less than 14% care with Bella
and Charlie. Maria has an adjusted taxable income of $45,000, Pablo has an
adjusted taxable income of $40,000, and Tessa has an adjusted taxable income of
$35,000. There are no relevant dependent children.
Child Support for Elena
Step 1: Work
out each parent’s child support income by deducting the self-support amount of
$16,883 from each of their incomes, and the multi-case allowance, if
necessary. Pablo’s multi-case allowance (which recognises Pablo’s obligation
to Bella and Charlie) is $4,546 (see section 47). This gives Pablo a
child support income of $18,571 and Marina a child support income of $28,117.
Step 2: Work
out the parents’ combined child support income by adding together their child
support incomes. Pablo and Marina’s combined child support income is $18,571 +
$28,117, or $46,688.
Step 3:
Work out each parent’s income percentage by dividing their child support income
by their combined child support income from Step 2. For Pablo this is
$18,571 divided by $46 688, or 39.78%, and for Marina this is $28,117 divided
by $46,688, or 60.22%.
Step 4:
Work out the percentage of care that each parent will have of each child.
Pablo has 24% care of Elena and Marina has 76% care of Elena.
Step 5:
Work out each parent’s cost percentage for each child by looking up the table
in section 55C. Pablo has a cost percentage of 24% and Marina has a cost
percentage of 76%.
Step 6:
Work out each parent’s child support percentage for each child by subtracting
their cost percentage for that child from their income percentage.
Pablo has a child support percentage of 39.78% – 24%
= 15.78% for Elena.
(This means that Pablo is
responsible for 39.78% of Elena’s cost, and bears 24% of the cost through care,
so he needs to transfer 15.78% of the cost to Marina through child support.)
Marina has a child support percentage of 60.22% – 76%
= –15.78%.
(This means that Marina is
responsible for 60.22% of Elena’s cost because she has 60.22% of the child
support income, but she bears 76% of the cost through care, so she is entitled
to child support from Pablo.)
Step 7:
Work out the costs of each child.
Marina and Pablo’s combined child support income is
$46,688 and, according to the Costs of the Children Table, this makes Elena’s
cost $10,525.
Step 8:
If a parent has a positive child support percentage, this is the share of the
cost of the child that they need to transfer to the other parent.
Pablo has a child support percentage of 15.78% for
Elena, so needs to transfer 15.78% of her costs to Marina through child
support.
Elena’s cost is $10,525 and 15.78% of this is $1,661,
so this is what Pablo owes in child support for her (subject to the operation
of the multi-case cap in Step 9).
Marina has a nil child support percentage for Elena,
and so does not need to transfer any child support for her (she is entitled to
child support from Pablo for Elena).
Step 9:
Work out each parent’s multi-case cap, if any. Pablo’s multi‑case cap
for Elena is $1,727 (see section 55E). Marina only has one child support case,
so does not have a multi-case cap.
Step 10:
The amount that Pablo must pay in child support to Marina is the lesser of the
amounts in Step 8 and Step 9. $1,661 is the lesser of the two amounts, so this
is what Pablo pays to Marina in child support. Pablo also meets 24% of Elena’s
costs, or $2,526, directly through care. Marina meets her 60.22% share of
Elena’s costs, or $6,338, directly through care.
Child Support for Bella and Charlie
Step 1: Work
out each parent’s child support income by deducting the self-support amount of
$16,883 from each of their incomes, and the multi-case allowance, if
necessary. Pablo’s multi-case allowance (which recognises his obligation to
Elena) is $2,273 (see section 47). This gives Pablo a child support income of
$20,844 and Tessa a child support income of $18,117.
Step 2: Work
out the parents’ combined child support income by adding together their child
support incomes. Pablo and Tessa’s combined child support income is $20,844 +
$18,117, or $38,961.
Step 3:
Work out each parent’s income percentage by dividing their child support income
by their combined child support income from Step 2. For Pablo this is
$20,844 divided by $38,961, or 53.50%, and for Tessa this is $18,117 divided by
$38,961, or 46.50%.
Step 4:
Work out the percentage of care that each parent or non‑parent carer will
have of the children. Tessa has 50% care of Bella and Charlie and Eleanor has
50% care of Bella and Charlie. Pablo has less than 14% care, so has a care
percentage of 0%.
Step 5:
Work out each parent’s cost percentage for each child by looking up the table
in section 55C. Pablo has a cost percentage of 0% and Tessa has a cost
percentage of 50%.
Step 6:
Work out each parent’s child support percentage for each child by subtracting
their cost percentage for that child from their income percentage.
Pablo has a child support percentage of 53.50% – 0% =
0% for Bella and Charlie.
(This means that Pablo is
responsible for 53.50% of Bella and Charlie’s cost because he has 53.50% of the
combined child support income, and bears none of the cost through care, so he
needs to transfer 53.50% of the cost through child support.)
Tessa has a child support percentage of 46.50% – 50%
= –3.50%.
(This means that Tessa is
responsible for 46.50% of Bella and Charlie’s cost because she has 46.50% of
the combined child support income, but she bears 50% of the cost through care,
so she is entitled to child support from Pablo.)
Note that Eleanor does not have a child support
percentage because, although she is bearing some of Bella and Charlie’s costs,
she has no legal obligation to financially support them, and therefore her
income is not used in the child support calculation.
Step 7:
Work out the costs of the children.
Pablo and Tessa’s combined child support income is
$38,961 and, according to the Costs of the Children Table, this makes Bella and
Charlie’s cost $9,215.
Step 8:
If a parent has a positive child support percentage, this is the share of the
cost of the child that they need to transfer in child support.
As noted in Step 6, Pablo has a child support
percentage of 53.50%, and so needs to transfer 53.50% of Bella and Charlie’s
costs through child support. Bella and Charlie’s cost is $9,215 and 53.50% of
this is $4,930, so this is what Pablo owes in child support for Bella and
Charlie (subject to the multi-case cap in Step 9).
Tessa has a negative child support percentage, and
therefore does not have to transfer any child support. She is entitled to
child support from Pablo.
Step 9:
Work out each parent’s multi-case cap, if any.
Pablo’s multi-case cap for Bella and Charlie is
$3,455 (see section 55E). Tessa only has one child support case, so does
not have a multi-case cap.
Step 10: The amount that Pablo must pay in child support is
the lesser of the amounts in Step 8 and Step 9. $3,455 is the lesser of the
two amounts, so this is what Pablo pays in child support.
Step 11:
Divide the total child support between the other parent and non-parent carer
according to the method in section 40A.
According to the table in section 55C, Tessa has
a cost percentage of 50% and Eleanor has a cost percentage of 50%.
The total of the cost percentages of the people
entitled to receive child support is 50% + 50% = 100%. Tessa’s cost percentage
divided by the cost percentages of the people entitled to receive child support
is therefore 50% divided by 100%, or 50%. Eleanor’s cost percentage divided by
the cost percentages of the people entitled to receive child support is also
50% divided by 100%, or 50%.
The total available child support is $3,455 and Tessa
and Eleanor each receive 50%, or $1,728.
Division
2, Subdivision D – Working out annual rates of child support using the incomes
of both parents in multiple child support cases
Section 38A
provides that Subdivision D of Division 2 is to be used to determine the
annual rate of child support payable for a child a day in the child support
period if only one parent is to be assessed in respect of the costs of that
child. There
are two formulas in Subdivision E, as set out in section 39
(Formula 5) and section 40 (Formula 6).
Formula 5 – one parent, other parent not a resident of Australia or
special circumstances
Section 39
sets out the method statement to be used to work out the annual rate of child
support payable for a day in a child support period if a non-parent carer of a
child has applied for a parent to be assessed in respect of the costs of the
child because of subparagraphs 25A(b)(ii) or (iii). Generally, a non‑parent
carer must apply for both parents to be assessed for child support because both
parents’ incomes are needed for the assessment. However,
subparagraphs 25A(b)(ii) and (iii) enable a non-parent carer to apply
against one parent only if the other parent is a non-resident of Australia or
there are other special circumstances for not requiring the non‑parent
carer to apply in respect of both parents. The method under section 39
recognises that where these special circumstances apply, there are still
potentially two parental incomes in relation to the child even though only one
parental income is available for the child support assessment.
The
method statement has nine steps.
Step
1 requires the parent’s child support income for the child for the day to be
worked out (see section 41) and doubled.
Step 2
requires the parent’s percentage of care for the child to be worked out (see
sections 48 to 51B).
Step
3 requires the parent’s cost percentage for the child for the day to be worked
out (see section 55C).
Step
4 requires the costs of the child for a day to be worked out, under
sections 55G and 55H, using the parent’s doubled income from Step 1 of
this method statement. The parent’s income is doubled because it would be
unfair to expect one parent to pay more child support just because the other
parent’s income was not available due to the special circumstances of the case,
for example, where other parent cannot be found. Consequently, the available
parent is assessed as though the other parent’s income is also being assessed
and that income is identical to the parent’s who is being assessed.
Step
5 requires the following rate to be determined:
This
formula in Step 5 works out the rate of child support payable by
calculating the child’s costs minus the costs the parent bears through care and
then calculating half of this amount. The cost is halved because the cost has been
calculated as though the parent will have half the responsibility for the cost.
Step
6 provides that if the parent is not assessed in respect of the costs of
another child in another child support case (that is, the parent does not have
a multi‑case cap) the annual rate of child support payable by the parent
for the child for the day is the rate worked out under Step 5.
Step
7 requires the parent’s multi-case cap to be calculated under section 55E
if the parent is assessed in respect of the costs of another child in another
child support case.
Step
8 provides that the annual rate of child support payable by the parent for the
child for a day in the child support period is the lesser of the rate worked
out under Step 5 and the parent’s multi‑case cap from Step 7.
Step
9 provides that if two non-parent carers have a percentage of care for the
child during the relevant care period, the parent must pay the annual rate of
child support that is payable under Step 5 or Step 8 to the carers in
accordance with section 40A. If there is only one non-parent carer, the
annual rate of child support payable by the parent is payable to that carer.
Step 9 also states that payment to the non-parent carer is subject to the
rule that the non-parent carer must have made an application for child support
in order to be entitled to receive the annual amount payable by the parent.
Example - one non-parent carer applying against one
parent only due to special circumstances or other parent not a resident of
Australia
Nick and Carolyn have one child, Billy, who is 14.
They separate and before a child assessment is made, Nick goes overseas to a
country where Australia does not have a reciprocal child support agreement.
This means that Nick cannot be assessed for child
support. Billy is living full-time with an uncle, Garry, who applies for
Carolyn to pay child support. Because it would be unfair to expect Carolyn to
pay more child support just because Nick has left the country, Carolyn is
assessed as though Nick is also being assessed, on an income identical to her
own. Carolyn has an adjusted taxable income of $35,000 and no relevant
dependent child.
Step 1: Work
out the parent’s child support income by deducting the self-support amount of
$16,883 from their income, and double this income. This gives Carolyn a child
support income of $36,234. This will mean that the costs of Billy are
calculated as though Nick’s income was also used and assessed at $35,000.
Step 2: Work
out the percentage of care that the parent has. Carolyn has less than 14% care
of Billy.
Step 3: Work
out the parent’s cost percentage. Carolyn’s cost percentage is 0%.
Step 4:
Work out the costs of the child. The child support income used to calculate
Billy’s cost is $36,234, making Billy’s cost $8,225.
Step 5:
Work out the rate payable, by calculating the costs of Billy minus the costs
that Carolyn bears through care, and then calculating half of this amount.
Carolyn does not bear any cost through care, so half of the cost is $4,113. The
cost is halved because the cost has been calculated as though Nick will have
half the responsibility for the cost.
Step 6:
Carolyn does not have any other child support case, so $4,113 is the amount of
child support that she must pay to Garry.
Formula 6 – one parent, non-parent carer, other parent deceased
Section 40
sets out the method statement to be used to work out the annual rate of child
support payable for a day in a child support period if a non-parent carer of a
child has applied for a parent to be assessed in respect of the costs of the
child because of subparagraph 25A(b)(iv) (other parent deceased). The
method under section 40 recognises that where one parent is deceased, the other
parent’s income is the only parental income available in relation to the child.
The method
statement has nine steps and works in much the same way as Formula 5,
except that the parent’s income is not doubled and the costs of the children
are not halved. This treatment reflects that where one parent is deceased, the
only income available to meet the costs of the child is the surviving parent’s
income.
Step
1 requires the parent’s child support income for the child for the day to be
worked out (see section 41).
Step
2 requires the parent’s percentage of care for the child to be worked out (see
section 48).
Step
3 requires the parent’s cost percentage for the child for the day to be worked
out (see section 55C).
Step
4 requires the costs of the child for a day to be worked out (see
sections 55G and 55H).
Step
5 requires the following rate to be determined:
Step
6 provides that if the parent is not assessed in respect of the costs of
another child in another child support case (that is, the parent does not have
a multi‑case cap) the annual rate of child support payable by the parent
for the child for the day is the rate worked out under Step 5.
Step
7 requires the parent’s multi-case cap to be calculated under section 55E
if the parent is assessed in respect of the costs of another child in another
child support case.
Step
8 provides that the annual rate of child support payable by the parent for the
child for a day in the child support period is the lesser of the rate worked
out under Step 5 and the parent’s multi‑case cap from Step 7.
Step
9 provides that if two non-parent carers have a percentage of care for the
child during the relevant care period, the parent must pay the annual rate of
child support that is payable under Step 5 or Step 8 to the carers in
accordance with section 40A. If there is only one non-parent carer, the
annual rate of child support payable by the parent is payable to that carer.
Step 9 also states that payment to the non-parent carer is subject to the
rule that the non-parent carer must have made an application for child support
in order to be entitled to receive the annual amount payable by the parent.
Example - two non-parent carers
applying against one parent only because other parent deceased
Mustafa and Aida have one child, Imran,
who is 3. They separate and later Aida dies. Imran lives 50% of the time with
each of two aunts, Nadira and Sam. Mustafa has an adjusted taxable income of
$40,000 and no relevant dependent child.
Step 1: Work
out the parent’s child support income by deducting the self-support amount of
$16,883 from their income. This gives Mustafa a child support income of
$23,117.
Step 2: Work
out the percentage of care that the parent has. Mustafa has less than 14% care
of Imran.
Step 3: Work
out the parent’s cost percentage. Mustafa’s cost percentage is 0%.
Step 4:
Work out the costs of the child. The child support income used to calculate
Imran’s cost is $23,117, making his cost $3,930.
Step 5:
Work out the rate payable, by subtracting the costs that Mustafa bears through
care from Imran’s cost. Mustafa does not bear any cost through care, so the
rate payable is $3,930.
Steps 6 to 8: Mustafa does not have any other child support case, so $3,930 is the
amount of child support that he must pay.
Step 9:
Divide the total child support between the other parent and non-parent carer
according to the method in section 40A. Sam and Nadira both have 50% of
the total cost percentage of the carers, so they each receive $1,965 from
Mustafa.
Division
2, Subdivision E – General provisions
Subdivision E
of Division 2 provides for some general rules in respect of the formulas.
Subsection 40A
sets out the rules for how to distribute child support where there is more than
one person entitled to child support, as may happen in the following
situations:
- after
working out a parent’s annual rate of child support payable under
Formula 2 (incomes of both parents, single child support case) or
Formula 4 (incomes of both parents, multiple child support case),
child support is payable to both a parent and a non-parent carer of a
child (paragraph 40A(1)(a)); or
- after
working out a parent’s annual rate of child support payable under
Formula 5 or 6 (income of one parent only), child support is payable
to two or more non-parent carers of a child (paragraph 40A(1)(b)); or
·
in assessing a parent for an
annual rate of child support for low income parents not on income support
(section 65A), an annual rate of child support is payable to either a
parent and a non-parent carer or to two non-parent carers of the child
(paragraph 40A(1)(c)).
Subsection 40A(1)
states that, in the above situations, the annual rate of child support that a
parent or non-parent carer (as the case requires) is entitled to be paid for a
child for a day in a child support period is to be determined according to the
following formula.
This
formula takes the total amount of child support to which all the carers (parent
and non-parent carer/s) are entitled, then distributes it to each carer
according to their cost percentage. This means that the available child
support is distributed according to the amount of care each carer has for the
child.
For example, Harold’s annual rate of child support is
$3,000. His ex‑partner, Jenny, has a cost percentage of 35% (because she
cares for their child 40% of the time). Jenny’s mother, Betty, has a cost
percentage of 65% (because she provides 60% of the care). Jenny and Betty
therefore have 100% care of the child between them. Jenny’s cost percentage of
35% divided by the total of hers and Betty’s cost percentages (100%) is .35.
Betty’s cost percentage of 65% divided by the total of hers and Jenny’s cost
percentages (100%) is .65. Therefore, the annual rate of child support to
which Jenny is entitled is $3,000 multiplied by .35, that is, $1,050. The
annual rate of child support to which Betty is entitled is $3,000 multiplied by
.65, that is, $1,950.
Subsection 40A(1)
provides that these rules are subject to section 40B, which provides that
a non-parent carer of a child is not entitled to be paid child support if they
have not made an application under section 25A.
Subsection 40A(2)
provides that even if the non-parent carer is not entitled to be paid child
support because they have not applied for it, their cost percentage is still
taken into account. That is, the non‑parent carer’s level of care
(translated into a cost percentage) is still relevant to calculating the
overall care provided to the child by a parent or a non‑parent carer or
carers, and therefore determining who bears, or should bear, the costs for the
child, even if the non‑parent carer does not apply for child support.
Subsection 40B
provides that a non‑parent carer is not entitled to be paid child support
unless they have applied for an assessment of the costs of the children in
respect of both parents, or, where only one parent’s income only is relevant
(as in Formulas 5 and 6), they have applied for an assessment in respect of
that parent.
A non‑parent carer may be involved in an
assessment under Formulas 2, 4, 5 or 6, or an assessment under
section 65A (annual rate of child support for low income earners not on
income support) or section 66 (minimum annual rate of child
support).
Subsection 40B(2)
provides that if a non‑parent carer is not entitled to be paid child
support for a child under subsection 40B(1), the annual rate of child
support that would otherwise be payable to the non-parent carer by the parent,
or parents, for the child is not payable.
Subsection 40B(3)
provides that if a non‑parent carer of a child has not applied for child
support at the time the administrative assessment of child support is made, but
applies later in the child support period, the non‑parent carer is
entitled to be paid the annual rate of child support worked out under
Part 5 from the day they make the application. That is, their entitlement
to child support will not be backdated to the date of the assessment.
Paragraph 40B(3)(d)
makes it clear that a new child support period will not be started when a non‑parent
carer makes the (later) application.
Subsection 40C
provides that the annual rate of child support payable by a parent for a child
is nil if the parent’s annual rate of child support is worked out under
section 35 (Formula 1) or section 37 (Formula 3) (incomes
of both parents, no non‑parent carers) and the parent’s percentage of
care for the child is more than 65%.
Section 40D
provides that the annual rate of child support payable by a parent for a child
is nil if the parent’s child support percentage for the child for the day is
nil
Division 7 –
Assessments and estimates of adjusted taxable income
Division
7, Subdivision A – Preliminary
Section 55J
provides a simplified outline of the Subdivision. It states that a
parent’s taxable income is, generally, the amount of taxable income that is
assessed under an Income Tax Assessment Act. However, it notes that the
Registrar may make a determination of a parent’s adjusted taxable income if the
parent has not lodged a tax return. Where a parent lodges a tax return after
an administrative assessment of child support has been made, there are limits
on the Registrar’s ability to amend the assessment for past periods. Finally,
section 55J notes that, as is currently the case, a parent can estimate the
amount of his or her adjusted taxable income for days in a child support
period.
Division 7, Subdivision B
– Adjusted taxable income determined by reference to taxable income for the
last relevant year of income
Subdivision
B of Division 7 provides the rules for dealing with a parent’s adjusted taxable
income, which is determined by reference to their taxable income for the last
relevant year of income
Section 56
is a clarifying rewrite of current section 56 of the Child Support
Assessment Act and makes no substantive changes to section 56. Minor
technical amendments are made, however, to reflect the new terminology in
Part 5 and delete references to redundant terminology.
Section 57
is a clarifying rewrite of current section 57 of the Child Support Assessment
Act and makes no substantive changes to section 57. Minor technical
amendments are made, however, to reflect the new terminology in Part 5 and
delete references to redundant terminology.
Section 58 is a clarifying rewrite of current
section 58 of the Child Support Assessment Act. It also amends section 58
to provide that, if the Registrar must determine an income where a parent has
not lodged a tax return for two years, the Registrar must determine that the
parent’s adjusted taxable income for that year of income is 2/3rd MTAWE
(subsection 58(3)).
Section 58A
is a new provision that requires the Registrar to amend immediately an
administrative assessment of child support if the assessment was made on the
basis of a determination under section 58 (Registrar determination of
components of adjusted taxable income) and the Registrar subsequently finds out
either the amount of the parent’s taxable income, or the total of the other
components of their adjusted taxable income or information allowing further
determinations under section 58, and the amount that is subsequently
ascertained is different from the amount that was previously determined under
section 58 (subsection 58A(1)).
Subsection 58A(2)
provides that if the parent lodged, or still has time to lodge, their tax
return on time in accordance with taxation rules when the Registrar ascertains
their taxable income, or other component of their adjusted taxable income, or
information allowing a further determination under section 58, the Registrar
is to amend immediately the administrative assessment for the child support
period on the basis that the parent’s taxable income, or other component of
their adjusted taxable income, for that year of income is, and always has been,
the amount that was subsequently ascertained. That is, the new administrative
assessment will apply retrospectively. This rule will also apply if the person
failed to lodge their return on time, but the subsequently ascertained taxable
income, or other component of adjusted taxable income, was higher than the
amount the Registrar had determined under section 58.
Subsection 58A(3)
provides that if subsection 58A(2) does not apply, the Registrar must
immediately amend an administrative assessment for the child support period on
the basis that for each later day in the period the parent’s taxable income, or
other component of adjusted taxable income, for that year of income is the
amount that was subsequently ascertained. That is, the new administrative
assessment will apply prospectively.
Subsection 58A(4)
makes it clear that new section 58A applies irrespective of whether or not
the Commissioner of Taxation has made an assessment under an Income Tax
Assessment Act of the parent’s taxable income for that year of income.
Division 7, Subdivision C – Child support income
determined by reference to estimate of adjusted taxable income for rest of
current child support period
Section 60 is a clarifying rewrite of current
section 60 of the Child Support Assessment Act and makes no substantive
changes to section 60. Minor technical amendments are made, however, to
reflect the new terminology in Part 5 and delete references to redundant
terminology. In particular, current references to a person’s child support
income amount, taxable income and supplementary amount are replaced with the
more comprehensive new concept of the parent’s adjusted taxable income.
Similarly, a reference to assessing the annual rate of child support payable by
or to a person is replaced with reference to assessing the parent in respect of
the costs of a child.
Section 60A
replaces current section 60A of the Child Support Assessment Act and makes
changes to reflect the new terminology in Part 5 and delete references to
redundant terminology. Changes are also made to reflect the new arrangements
for Social Security Appeals Tribunal review of child support decisions.
Section 60A provides for a notice of administrative assessment to be generally
treated as conclusive evidence of the proper making of the assessment and of
the correctness of the particulars in the notice. The revised section 60A
disapplies this rule for proceedings under specified provisions in the Child
Support Registration and Collection Act. This is because section 116 of that
Act already provides more generally for documents produced to be prima facie
evidence, so the rule in section 70 is superfluous in those cases.
Section 60B
replaces current section 60B of the Child Support Assessment Act and makes
changes to reflect the new terminology in Part 5 and delete references to
redundant terminology. Changes are also made to reflect the new arrangements
for Social Security Appeals Tribunal review of child support decisions.
Section 60B provides for a notice of administrative assessment to be generally
treated as conclusive evidence of the proper making of the assessment and of
the correctness of the particulars in the notice. The revised section 60B
disapplies this rule for proceedings under specified provisions in the Child
Support Registration and Collection Act. This is because section 116 of that
Act already provides more generally for documents produced to be prima facie
evidence, so the rule in section 70 is superfluous in those cases.
Subsection 60B(3) provides that a contravention of subsection 60B(2)
in relation to a decision does not affect the validity of the decision.
Section 61
is a clarifying rewrite of current section 61 of the Child Support
Assessment Act and makes no substantive changes to section 61. Minor
technical amendments are made, however, to reflect the new terminology in
Part 5 and delete references to redundant terminology.
Section 62
is a clarifying rewrite of current section 62 of the Child Support
Assessment Act and makes no substantive changes to section 62. Minor
technical amendments are made, however, to reflect the new terminology in
Part 5 and delete references to redundant terminology.
Section 63 is a clarifying rewrite of current
section 63 of the Child Support Assessment Act and makes no substantive
changes to section 63. Minor technical amendments are made, however, to
reflect the new terminology in Part 5 and delete references to redundant
terminology.
Section 63A
is replaces current section 63A of the Child Support Assessment Act and
makes minor technical amendments to change references to ‘person’ to ‘parent’,
because the provision only applies to parents.
Section 63B
replaces current section 63B of the Child Support Assessment Act and makes
minor technical amendments to change references to ‘person’ to ‘parent’,
because the provision only applies to parents.
Section
63C is a new provision. It provides that where a parent elected to have their
child support income amount (and therefore their assessment) determined by
reference to an estimate of their taxable income (under section 60) and
the estimate resulted in a minimum rate assessment, the Registrar can review
the estimate, once the period for which the estimate is in place has passed, to
determine how it compared with the parent’s actual income and, if warranted,
amend the assessment from a date determined by the Registrar.
Section 64
is a clarifying rewrite of current section 64 of the Child Support
Assessment Act with minor technical amendments to reflect the new terminology
in Part 5 and delete references to redundant terminology. It also adds
new paragraph 64(1)(c), to provide that where an estimate results in a minimum annual rate
being payable it is not subject to reconciliation. (However, the estimate can
be reviewed – see section 63C above).
Section 64A
replaces current section 64A of the Child Support Assessment Act and makes
minor technical amendments to reflect the new terminology in Part 5 and
delete references to redundant terminology. The new section also reflects, in
the notification requirement in subsection (6), the new arrangements for
review of child support decisions by the Social Security Appeals Tribunal,
instead of by the Administrative Appeals Tribunal as at present.
Division 8 – Provisions relating to the making of assessments
Division
8, Subdivision A – Simplified outline
Division 8 of Part 5
contains provisions relating to the making of assessments.
Section 64B
provides a simplified outline of the Subdivision, which provides that, in
making an administrative assessment of child support, the Registrar may act on
the basis of documents and information in his or her possession. In some cases
the Registrar may assess the annual rate of child support for a child that is
payable by a parent who is on a low income but is not receiving an income
support payment. The Registrar may also assess the annual rate of child
support payable by a parent for all the children in a child support case as the
minimum annual rate. Section 64B states that Subdivision C of
Division 8 contains rules relating to the making of administrative
assessment.
Division
8, Subdivision B – Annual rates of child support for low income parents and
minimum annual rates of child support
Section 65A is a
new provision dealing with the annual rate of child support for low income
parents not on income support.
Parents who are
not in receipt of an income support payment but whose adjusted taxable income
is lower than the annual parenting payment (single) maximum basic rate plus
pension supplement (pension PP (single) maximum basic rate), that is,
approximately $13,000, will be required to pay an annual rate of child support
per child of $1,060. A definition of pension PP (single) maximum basic
rate is inserted into section 5 of the Child Support Assessment Act by item
40 of Schedule 2. This new annual rate for low income parents not
on income support addresses the situation where people minimise their income in
a way that does not fairly represent their true income, or real capacity to pay
child support, and thereby reduce or avoid the contribution they should make
towards the costs of their children. The view is that if people genuinely are
on a low income they would access social security, or other, income support
payments. This new rule is contained in subsection 65A(1).
Subsection 65A(1)
provides that this rule will also apply where a parent who is not on an income
support payment has elected to have their assessment based on their estimated
income (under section 60 of the Child Support Assessment Act) and their
estimate of this income is less than the pension PP (single) maximum basic
rate.
The annual rate of
child support payable for a child by low income parents who are not on income
support is $1,060 (subsection 65A(2)). This amount is to be indexed in line
with CPI increases and a note to this effect is at the end of subsection 65A(2)
advising the reader that the indexation rule is in section 153A.
These rules will
not apply, however, if the parent has at least shared care of the child
(paragraph 65A(1)(c)), recognising that the parent bears their share of the
costs of the child by providing this care. If a parent has shared care in one
child support case and no care in another case, they will only be required to
pay the annual rate in section 65A in respect of the children in the child
support case for which they do not have shared care.
The annual rate in
section 65A is to be applied to a parent in respect of each of the children for
whom they are assessed for child support. However, there is a cap of three on
the number of section 65A annual rate liabilities that a parent can have
(subsection 65A(3). This means that although a low income parent may have
four or five children, and potentially four or five section 65A annual
rate liabilities, their total liability will be capped at three times this
annual rate. This is consistent with the costs of children being capped at 3.
Where there are
more than three children, subsection 65A(4) provides that the capped liability
of three times the section 65A annual rate should be distributed equally
between all the children. This is achieved by dividing the total of the three
annual rates by the total number of children for whom child support is payable
by the parent and paying the resulting amount to the parent or non‑parent
carer of each child. For example, if Fred would be liable for the annual rate
for four children, the most he will pay is three times the annual rate. The
other parent, or non‑parent carer, of each of the four children will then
be entitled to 25% of the total of the three annual rates.
Subsection 65A(5) provides for the situation where a child’s care
is shared between the other parent and a non-parent carer. In this situation,
if the other parent and the non-parent carer share equally the care of the
child, the annual rate payable in respect of the child is distributed according
to section 40A.
Some people may
genuinely be on a low income and choose not to access income support payments
and it would be unfair to apply this annual rate rule to them. Consequently, a
parent will not be required to pay the section 65A annual rate for any of
the children if they apply to the Registrar for this rule not to apply to them
(paragraph 65B(1)(a)) and the Registrar is satisfied that the total financial
resources available to support the person are lower than the pension PP
(single) maximum basic amount (subsection 65B(2)). A parent may be deemed to
have applied for a reduction if, immediately before the end of the child
support period, their rate was not determined under section 65A because of
an existing determination under section 65B (paragraph 65(1)(b)). In
determining whether the annual rate should not apply to the parent, the
Registrar will consider the current income of the parent for the 12 months commencing
from the date the person applied to not have the annual rate apply. Income
has the same meaning as the definition of income for subsection 66A(4)
of the Child Support Assessment Act, including the ability to prescribe certain
matters in the regulations.
A note at the end
of subsection 65B(2) advises the reader that if the Registrar refuses to
grant an application under this section, the Registrar must serve a notice on
the applicant under section 66C.
The Registrar has
a discretion to determine the date, including a retrospective date, in the
current child support period from which the section 65A annual rate is not
to apply to a person (subsection 65B(3)). It is intended that the
determination will generally apply from the beginning of the current child
support period, or, where there is an identifiable event that has caused the
reduction in income, from the happening of the event, unless this date would
cause an overpayment. The determination will then apply for the remainder of
the current child support period (unless a change of assessment otherwise
occurs).
If the Registrar
determines, under section 65B, that the annual rate rule in section 65A should
not apply to a parent, the parent’s child support is to be assessed in
accordance with the minimum annual rate of child support rules in section 66 of
the Child Support Assessment Act.
Section 66
substitutes current section 66.
Currently, where
an annual rate of child support payable for a child or children by a liable
parent is assessed as less than the minimum annual rate of child support, the
minimum annual rate of child support is generally payable (see section 66 of
the Child Support Assessment Act). The rules in section 66 have been broadened
so that the provision will now also:
·
apply to
income support recipients;
·
not apply
to a parent who would otherwise be liable for the payment if they provide at
least regular care for a child in a child support case, thereby acknowledging
the costs a parent bears for their children through care; and
- apply on a
per child support case basis. This is different to the current position
where, if a payer has a liability in more than one child support case, the
minimum liability is apportioned between the payees according to how many
children each has in their care (see subsection 63(3) of the Child
Support Assessment Act).
Consequently, new
subsection 66(1) provides that the parent will be required to pay the minimum
annual rate of child support if either of subparagraphs 66(1)(b)(i) or
(b)(ii) applies (see below) and they do not have at least regular care of at
least one of the children in the child support case for which they are assessed
(see subparagraph 66(1)(a)). So, for example, if a parent has three child
support children in their child support case and provides at least regular care
for any one of them, they will not be subject to the minimum rate rule for that
case.
Subparagraph
66(1)(b)(i) provides that the minimum annual rate of child support will apply
if a parent is on an income support payment at the maximum basic rate.
Subsection 66(9) provides that the term income support payment means a
payment of living allowance at the maximum rate under the ABSTUDY scheme, as
well as an income support payment as defined in subsection 23(1) of the Social
Security Act. The Social Security Act definition essentially covers: a social
security benefit; a social security pension; an age service pension, invalidity
service pension, partner service pension or carer service pension under Part
III of the Veterans' Entitlements Act 1986; and, an income
support supplement under Part IIIA of the Veterans' Entitlement
Act 1986.
Subparagraph
66(1)(b)(ii) provides that the minimum annual rate rule will apply to a
particular child support case if the total amount that a parent would be
required to pay in that case is less than the minimum annual rate of child
support.
Subsection 66(2)
makes it clear that if an assessment could be made under either of section 65A
(annual rate for low income parents) or section 66, the assessment must be made
under section 65A.
Subsections 66(3)
and 66(4) provide for when a minimum rate assessment will commence and finish.
If a parent is assessed in respect of a minimum annual rate
because they receive an income support payment at the maximum basic rate, the
minimum rate assessment applies from the first day in the child support period
that the parent receives the income support payment at the maximum basic rate
and ends either at the end of the child support period or 28 days after the
parent stops receiving the payment at that rate, even if that date would be in
a new child support period (subsection 66(3)). This allows parents a short
period during which their child support obligations remain low, while they
manage the costs of resuming employment or increasing their employment, for
example, while waiting for their first payday.
If a parent is
assessed in respect of a minimum annual rate and is not on an income support
payment, the assessment applies from the first day in the child support period
that the parent would be assessed for a minimum annual rate of child support
and ends 28 days after the parent would be so assessed, even if that date would
be in a new child support period (subsection 66(4)). As with
subsection 66(3), this allows parents a short period during which their
child support obligations remain low while they manage the costs of resuming
employment or increasing their employment.
Subsection 66(5)
states that the minimum annual rate of child support is $320 and a note at the
end of the subsection advises the reader that this amount is indexed annually
under s153A.
Subsection 66(6)
caps at three the total number of minimum annual rates for which a parent can
be liable and this includes cases where child support is not payable to a
non-parent carer because they have not applied for it (subsection 40B(1)
refers). This means that a person who has children in more than three child
support cases will not pay an amount more than three times the minimum annual
rate.
If a parent has
more than three child support cases for which they are otherwise liable for the
minimum annual rate, the distribution of the amount of money that is payable is
worked out using the formula in subsection 66(6). This formula operates by
dividing the total of the three annual rates by the total number of the
parent’s child support cases.
For example, if Fred would be liable for the minimum annual rate
in four child support cases, the most he will pay is three times the minimum
annual rate of $320, which is $960. This rate is then divided by the number of
cases (four) to produce an amount of $240 per child support case and this
amount is distributed to the carer or carers entitled to child support in each
child support case.
If the minimum
annual rate, or rates, for which a person is liable is to be paid to both the
other parent and a non-parent carer, or to two non-parent carers, of the
children (because they share the care of the children in the child support
case), the money is to be distributed to the parent or carer in accordance with
subsection 66(7). This subsection provides that if the care is shared equally
between the carers, the rate payable is to be shared equally, otherwise only
the carer who has the greatest percentage of care of the children is entitled
to be paid the rate.
As is currently
the case, section 66 does not apply in relation to child support payable in
respect of a child in accordance with a departure order (under Division 4 of
Part 7 of the Child Support Assessment Act) or a child support agreement made
by consent that has effect as if it were such an order (subsection 66(8)).
Note that, where
an application for assessment is made by a non-parent carer, it is possible
that two parents in the child support case may each be liable to pay the
minimum rate to the non-parent carer, or that one may be liable to pay the
minimum rate and the other may be required to pay an amount of child support to
the non-parent carer.
In some
situations, a person can elect to have their child support income amount (and
therefore their assessment) determined by reference to an estimate of their
taxable income (see Subdivision B of Part 5). Where an estimate has resulted
in a minimum rate assessment, there is to be no reconciliation of the estimated
amount with the parent’s actual adjusted taxable income after the end of the
child support period. Consequently, section 64, which enables the Registrar to
do reconciliations of estimates, is being amended to provide that where an
estimate results in a minimum annual rate being payable it is not subject to
reconciliation (see paragraph 64(1A)(c)).
Section 66A
replaces existing section 66A of the Child Support Assessment Act, which
currently enables the Registrar to reduce a minimum annual rate assessment
under section 66 to nil if the liable parent makes an application for such a
reduction and the parent’s income, for the 12 months starting from the
beginning of the relevant child support period, will be less than the minimum
annual rate (noting that income for this provision is defined in subsection
66A(4) and regulation 7CA of the Child Support Assessment Act regulations).
These rules continue in section 66A. An assessment made under section 66A
will apply to each day in the period to which the assessment under
section 66 (minimum assessment) would have applied
(subsection 66A(3)). A further change from current section 66A is
that the 12 month period used to assess a person’s income for the purposes
of section 66A starts from the date the parent’s lodges an application
under this section, rather than start of child support period as is currently
the case.
Section 66C replaces current section 66C
with minor technical changes to reflect changed terminology and the new
arrangements for Social Security Appeals
Tribunal review of child support decisions. New subsection 60C(3)
provides that a contravention of subsection 60C(2) in relation to a
decision does not affect the validity of the decision.
Division 8, Subdivision C – Making administrative
assessments
Section 66D
replaces, without change, current section 65.
Section 67
replaces current section 67 without substantive change.
Section 67A
replaces current section 49A, without substantive change.
Section 68
replaces current section 68.
Section 69
replaces current section 69, with minor technical changes to reflect changed
terminology.
Section 70 replaces current section 70 to
reflect the new arrangements for Social Security Appeals Tribunal review of
child support decisions. Section 70 provides for a notice of
administrative assessment to be generally treated as prima facie evidence of
the proper making of the assessment and of the correctness of the particulars in
the notice. The revised section 70 disapplies this rule for proceedings under
specified provisions in the Child Support Registration and Collection Act.
This is because section 116 of that Act already provides more generally for
documents produced to be prima facie evidence, so the rule in section 70 is
superfluous in those cases.
Section 71
replaces current section 71.
Section 72
replaces current section 72 to reflect the new arrangements for Social Security
Appeals Tribunal review of child support decisions.
Section 73
replaces current section 73.
Section
73A replaces current subsection 39(3).
Section
74 replaces current section 74.
Section 74A
replaces current section 74A and applies in the situation where child
support is payable for a child and the Registrar is notified, or otherwise
becomes aware, that the person’s percentage of care for the child changes by
more than 7.1%, or the person’s percentage of care falls below, or increases
to, 14% or more. In this situation, if, under section 75, the Registrar
amends the administrative assessment to alter the rate at which child support
is payable for the child, the altered rate is to apply on and from the day the
Registrar was notified, or otherwise became aware of, the change to the
parent’s percentage of care. This applies subject to the parents fulfilling
the other requirements of having their level of care changed where they have a
previous agreement, or court ordered arrangement, about care (see Subdivision B
of Division 4). Where a specific provision of Subdivision C of
Division 4 provides specifically for an earlier date of effect, this
restriction does not apply.
Section 75
replaces current section 75 and makes a number of amendments mainly to
provide for the changed terminology in Part 5. However, it also inserts a
new rule that provides that, subject to section 53 the Registrar must not
make amend an administrative assessment due to a change in the person’s
percentage of care unless the change to the person’s percentage of care is more
than 7.1%, or the person’s percentage of care falls below, or increases to, 14%
or more (subsection 75(2)).
Section 76
replaces current section 76 and makes a few amendments, mainly to provide
for the changed terminology and concepts in Part 5. Subsection 76(2)
differs from current subsection 76(2) in that it requires a notice given
under the new section to state the age ranges of children who are multi‑case
children, the costs of the child, and an assessed parent’s, and non‑parent
carer’s, percentage of care. The new section also reflects, in its
requirements to specify certain review rights and further options, the new
review arrangements for child support decisions, under which the Social
Security Appeals Tribunal provides the first tier of external review, with
Administrative Appeals Tribunal review being available in relation to
percentage of care decisions if the person is aggrieved by the Social Security
Appeals Tribunal decision.
Division 9 – Liability
to pay child support as assessed
Division
9 of Part 5 deals with provisions relating to liability to pay child support.
Section 76A
provides a simplified outline of the Division, which states that the amount of
child support payable for a child or children for a day in a child support
period is the daily rate specified in the notice of assessment.
Section 77
is a clarifying rewrite of existing section 77 and does not make any
substantive amendment.
Section 78
is a clarifying rewrite of existing section 77 and does not make any
substantive amendment. However, a note is added to the end of the
section to advise the reader that Section 66 of the Child Support
Registration and Collection Act also deals with when child support debts become
due and payable.
Section 79
replaces existing section 79 and adds a note to the end of the section to
advise that amounts covered by section 30 of the Child Support Registration and
Collection Act are debts due to the Commonwealth.
Item
2 adds ‘Schedule 1 - The
Costs of the Children Table’ to the end of the Child Support Assessment Act.
Clause
1 sets out ‘The Costs of the Children Table’. A note after the heading refers
the reader to section 55G, which deals with how to work out the costs of
children using the Costs of the Children Table.
The
Costs of the Children Table sets out the cost of children according to the
combined child support income of their parents, or the child support income of
one parent if only one parent can be assessed.
Clauses
2 to 3 of Schedule 1 explain how the table works.
The
table is composed of a number of rows and columns. Each column has two
amounts, setting out the upper and lower limits of each income range used when
calculating the costs of children. Different percentages apply to different
bands, to reflect that spending on children is not a constant percentage of
parental income as that income rises. Each row has a number of children, from
one to three, in different age ranges, young, old, and mixed. Research shows that the net
costs of children increase only very slightly for the fourth and subsequent
children in a family, because of the economies of scale in larger households,
the constraints on spending of household budgets, and the structure of family
tax benefit. Therefore, where there are four or more children in a family, the
same costs as for three children are used.
Thus the figures to be used in calculating the costs of children for any given
parents can be found by locating the appropriate row for the number and age of
their children, and the appropriate column for their combined child support
income amount.
To
find the cost of the children, the percentage in the parents’ income band is
multiplied by the amount of combined child support income that they have above
the lower limit of that band. To deal with the income below the lower limit of
that band, the full amount of income in each band (½ MTAWE in each, as each
band is defined as ½ MTAWE) is multiplied by the percentage applicable to that
band. The cost of the children is the total of all the resulting amounts.
Subclause 1(1)
deals with the child support income ranges – fraction of MTAWE row, the
first row in the table. Subclause (1) explains that in each column of the
Fraction of MTAWE row are specified two amounts, namely, the parents’ combined
child support income or the parent’s child support income amount (for when only
one parent’s income is used).
Subclause
1(2) provides that to work out the first dollar amount in each column (other
than the first column) of the first row, it is necessary to take the second
amount in the previous column (worked out under subclause (3)) and add one
dollar. A note points out that the first dollar amount in each column is the
lowest combined child support income, or child support income, covered by that
column.
Subclause
1(3) explains that to work out the second dollar amount in each column (other
than the last column), it is necessary to multiply the second fraction
specified in that column by the annualised MTAWE figure for the relevant
September quarter. A note points out that the second dollar amount in each
column is the highest combined child support income, or child support income,
covered by that column.
Subclause
2(1) provides that each item in the Costs of the Children Table sets out a
method of working out the costs of the children. Subclause 2(2) then provides
that if, under section 55G, an item is identified in the first column of the
table, the costs of the children is the amount that is the
percentage specified in that item of the parents’ combined child support
income, or the parent’s child support income, (as the case requires).
Subclause
2(3) then provides that if, under section 55G, an item (the relevant item)
is identified in a row in the second, third, fourth or fifth column (the relevant
column), the costs of the children is the total of the
following amounts:
(a) the total of the amounts worked out for
each item in that row in each of the previous columns by multiplying the
percentage specified in that item by the highest combined child support income
minus the lowest combined child support income, or child support income,
covered by that column;
(b) the amount worked out by multiplying the
percentage specified in the relevant item by the difference between:
(i) the
parents’ combined child support income, or the parent’s child support income,
(as the case requires); and
(ii)
the highest combined child
support income or child support income in the previous column.
Finally,
subclause 2(4) provides that if under section 55G, an item is identified
in a row in the last column, the costs of the children is the
total of the amounts worked out for the items in that row in each of the
previous columns in accordance with paragraph (3)(a).
Essentially,
then, the table sets out the percentage of each dollar of the parents’ combined
child support income that the parents would spend on their children. The
percentages vary according to the level of the parents’ income. Because
expenditure on children decreases as a percentage of income as income increases
(even though expenditure in dollar terms increases), the percentages in the
table decrease for each increasing band of income, from left to right in the
table. Because older children cost more than younger children, there are also
different categories for young children (under 13), older children (13 or
over), and situations where at least one child is under 13 and one child is 13
or over.
The
bands of income are defined in terms of Male Total Average Weekly Earnings.
This is a measure of average income in Australia. Because this measure is
published regularly by the Australian Bureau of Statistics, the amount of child
support that parents pay will keep up with movements in income.
The
following table shows how the Costs of the Children Table will look when
populated with dollar amounts. (Note that the MTAWE figures used in this table
are provided as a sample only, as they were estimates for 2006 during research
on the costs of children. These figures approximate actual 2006 figures but
are not identical).
The Costs of
the Children
|
Parents’ combined child support income or parent’s
child support income1
|
|
Fraction
of MTAWE
|
$0 – $25,324 2
|
$25,325 – $50,648 3
|
$50,649 – $75,972 4
|
$75,973 – $101,296 5
|
$101,297 – $126,620 6
|
Over $126,620 6
|
|
Child support children
|
|
|
|
Costs of
children
|
|
All
children aged 0–12 years
|
|
1 child
|
17c for each $1
|
$4,305
plus 15c for each $1 over $25,324
|
$8,104
plus 12c for each $1 over $50,648
|
$11,143
plus 10c for each $1 over $75,972
|
$13,675
plus 7c for each $1 over $101,296
|
$15,448
|
|
2
children
|
24c for each $1
|
$6,078
plus 23c for each $1 over $25,324
|
$11,902
plus 20c for each $1 over $50,648
|
$16,967
plus 18c for each $1 over $75,972
|
$21,525
plus 10c for each $1 over $101,296
|
$24,058
|
|
3+
children
|
27c for each $1
|
$6,837
plus 26c for each $1 over $25,324
|
$13,422
plus 25c for each $1 over $50,648
|
$19,753
plus 24c for each $1 over $75,972
|
$25,830
plus 18c for each $1 over $101,296
|
$30,389
|
|
All
children aged 13+ years
|
|
1 child
|
23c for each $1
|
$5,825
plus 22c for each $1 over $25,324
|
$11,396
plus 12c for each $1 over $50,648
|
$14,435
plus 10c for each $1 over $75,972
|
$16,967
plus 9c for each $1 over $101,296
|
$19,246
|
|
2
children
|
29c for each $1
|
$7,344
plus 28c for each $1 over $25,324
|
$14,435
plus 25c for each $1 over $50,648
|
$20,766
plus 20c for each $1 over $75,972
|
$25,830
plus 13c for each $1 over $101,296
|
$29,123
|
|
3+
children
|
32c for each $1
|
$8,104
plus 31c for each $1 over $25,324
|
$15,954
plus 30c for each $1 over $50,648
|
$23,551
plus 29c for each $1 over $75,972
|
$30,895
plus 20c for each $1 over $101,296
|
$35,960
|
|
At least
one child aged 0-12 years and one child aged 13+ years
|
|
2
children
|
26.5c for each $1
|
$6,711
plus 25.5c for each $1 over $25,324
|
$13,168
plus 22.5c for each $1 over $50,648
|
$18,866
plus 19c for each $1 over $75,972
|
$23,678
plus 11.5c for each $1 over $101,296
|
$26,590
|
|
3+
children
|
29.5c for each $1
|
$7,471
plus 28.5c for each $1 over $25,324
|
$14,688
plus 27.5c for each $1 over $50,648
|
$21,652
plus 26.5c for each $1 over $75,972
|
$28,363
plus 19c for each $1 over $101,296
|
$33,174
|
|
|
|
|
|
|
|
|
|
|
|
1. A parent’s child support
income is made up of their adjusted taxable income plus, if relevant, certain
other amounts (such as net rental property loss) minus a self-support amount
and minus, if relevant, a relevant dependent child amount and/or multicase
allowance. Combined child support income is the total of the two parent’s
child support income.
2. 0.5 times MTAWE 3.
MTAWE 4. 1.5 times MTAWE
5 2 times MTAWE 6.
2.5 times MTAWE
Each
year, the Table will be Gazetted in this way with updated MTAWE figures (see item 98
in Schedule 2 to this bill) and populated with dollar amounts, in
the same way as the Tax Commissioner publishes a tax table each year. The tax
table sets out an amount payable at the lower limit of each income tax band and
a marginal rate for each dollar an income band, above the lower limit.
Gazetting the Costs of the Children Table will make it simpler for parents to
determine the costs of their children.
This
means that to work out the costs of the children in a child support case, it is
first necessary to locate the correct category of costs in terms of ages and
number of children. Then locate the correct income band for the parents’
combined child support income. Subtract the lower limit of that income band
from the parents’ combined child support income, and multiply the remaining
income by the specified percentage. Then add the dollar amount specified in
the same place. This set dollar amount is the total that is payable for all
the bands below the parents’ particular band.
Using the figures in the table above, for example,
this means that if two parents have a combined child support income of $78,000
and one child, they do not have to calculate 17c for every dollar up to
$25,324, plus 15c for every dollar between $25,325 and $50,648, plus 12c for
each dollar between $50,648 and $75,972, plus 10c for every dollar between $75,973
and their combined child support income. Rather, they can simply add $11,143
to the amount found by calculating 10c for every dollar between $75,973 and
their combined child support income.
Schedule 2 – Consequential amendments and application
and saving provisions relating to the formulas
Summary
The
amendments made by Schedule 1 relating to the new child support formulas
provide for many new and amended concepts, and generally affect numerous other
provisions in the child support legislation, family assistance law and Family
Law Act. This Schedule ensures that the necessary consequential amendments are
made and provides for how the new formula provisions will apply on
implementation.
Background
These
amendments ensure that existing provisions in the various Acts affected by the
new formulas are either repealed where no longer appropriate, or revised to
preserve the intended effect of the provisions in light of the new
arrangements. In particular, various new definitions are inserted into section 5
of the Child Support Assessment Act so that the new concepts apply accurately
throughout that Act as appropriate. Further amendments reflect the new
application arrangements for administrative assessment, in which there is no
longer a distinction between eligible carer and liable parent applicants – now,
applications may be made simply by parents or non-parent carers. Other
provisions are being amended to reflect the fact that applications are now
generally made on the basis of both parents being assessed for the costs of the
child (thereby, giving effect to the shared-cost approach to child support
recommended in the Taskforce Report).
Explanation of the changes
Part
1 – Consequential amendments
Family Assistance Act
The
family tax benefit income tests use the concept of adjusted taxable income
(ATI), which is defined in Schedule 3 to the Family Assistance Act. The
concept is also relevant for the purposes of child care benefit.
The
components of ATI are set out in subclause 2(1) of Schedule 3. These include
the individual’s adjusted fringe benefits total for the relevant income year
and the individual’s target foreign income for the year. The relevant
definitions are in clauses 4 and 5 of Schedule 3 respectively.
The
amendments made by items 1 and 2 modify these two components of ATI so
that the concept of ATI for the purposes of the family assistance law is the
same as that applicable under the new child support laws.
Item 2 repeals existing clauses 4 and 5.
New
clause 4 uses the concept of reportable fringe benefits total and aligns
the new definition for family assistance purposes with the definition of reportable
fringe benefits total as it applies in the child support context. The
change for family assistance purposes is that the new definition uses the gross
value of reportable fringe benefits whereas the existing definition uses the
net value.
The
re-naming of this concept is then reflected in the amendment made by item 1
to paragraph 2(1)(b) of Schedule 3 to the Family Assistance Act.
New
clause 5 inserts a new definition of target foreign income that is, in
substance, the same as the new definition inserted into the Child Support
Assessment Act. For family assistance purposes, the main difference is the
inclusion of new paragraph 5(1)(b) which brings within the definition any
amount of income not covered by (a) that is exempt from tax under
section 23AF or 23AG of the Income Tax Assessment Act 1936, reduced
(not below nil) by the total amount of losses and outgoings that are not of a
capital nature incurred by the individual in deriving the exempt income. This
will ensure that certain foreign income that is exempt from tax but currently
included as income for child support purposes will also be included as income
for family assistance purposes.
These
amendments apply in relation to the 2008-09 income year and later income
years. The relevant application provision is in item 116.
Child
Support Assessment Act
Items
3 to 98 are amendments of the Child
Support Assessment Act.
Item
3 amends paragraph 4(2)(b) to
reflect, in relation to the objects of the Act, the fact that the Child Support
Scheme is now based on the costs of children.
Item
4 changes existing section 5 to
subsection 5(1), given new subsections are being added to section 5 by item
59 and 60.
Items
5 to 59 amend section 5 to
add new definitions that are relevant to the operation of the new formulas,
repeal redundant definitions and amend further definitions as necessary.
Item
5 repeals the definition of adjusted
income amount, which is no longer needed in the Act.
Item
6 provides that the term adjusted
taxable income has the meaning given by section 43.
Item 7
provides that the term annualised MTAWE figure has the meaning given by
section 5A.
Item
8 inserts a new definition of care
period, as having the meaning given by section 48.
Item
9 repeals the definition of carer
application, which is no longer needed in the Act.
Item
10 repeals and substitutes the
definition of carer entitled to child support to recognise the more
complex workings of the new Child Support Scheme, in which a parent or
non-parent carer becomes entitled to child support because of the assessment and
allocation of costs under the new administrative assessment provisions, rather
than simply on acceptance of an application for administrative assessment.
Item
11 inserts a new definition of child
support case, which means, in relation to a child, all the assessments for
child support for all children who are children of both the parents of the
child. The child support case includes all the children of the parental
relationship, so if the parents have more than one child from their
relationship, all their children belong to the same child support case. So,
for example, if two parents have an administrative assessment for each of their
two children, there is one child support case in relation to those two
children. If one of those parents also has an administrative assessment for a
third child with a different parent, the third child would be covered by a
different child support case to the case containing the first two children.
Item
12 provides that the new term child
support income has the meaning given by section 41.
Item
13 repeals the no longer necessary
current definition of child support income amount.
Item
14 repeals and substitutes the
definition of child support percentage, to have the meaning given by
section 55D.
Item
15 provides that the new term combined
child support income has the meaning given by section 42.
Item
16 provides a new definition of cost
percentage, with the meaning given by section 55C.
Item
17 provides that the new term costs
of a child has the meaning given by section 55H.
Item
18 provides that the new term Costs
of the Children Table means the table in Schedule 1 to the Child Support
Assessment Act.
Item
19 inserts a new definition of court
order for the purposes of Part 5 of the Child Support Assessment Act
and provides that it has the meaning given by section 47B.
Items
20 and 22 repeal two redundant
definitions, disregarded income amount and exempted income amount.
Item
21 repeals the definition of EAWE
amount, which is not needed for the new Scheme.
Item
23 inserts a new definition of income
amount order.
Item
24 provides that the new term income
percentage has the meaning given by section 55B.
Item
25 inserts a new definition of income
support payment and states it is to have the meaning given by
subsection 66(9).
Item
26 inserts a new definition of Income
Tax Assessment Act, as meaning either the 1936 or the 1997 Act of that
name.
Item
27 makes a minor consequential
amendment to the definition of index number.
Item
28 repeals and substitutes the
definition of last day, in relation to a child’s secondary school year.
This is being changed to clarify that the last day is the day determined by the
child’s school as the last day of classes for the school year, and, if a child
has to sit an examination and the last day of examinations falls after the last
day of classes, then the last day is the end of the examination period.
Item
29 repeals and substitutes the
definition of last relevant year of income. Although the definition
itself has not changed, the example has been updated to make it more useful.
Item
30 repeals and substitutes the
definition of liable parent, to recognise the more complex workings of
the new Child Support Scheme, in which a parent becomes a liable parent as a
result of the assessment and allocation of costs under the new administrative
assessment provisions, rather than simply on acceptance of an application for
administrative assessment.
Items
31 and 32 repeal the redundant
definitions of liable parent application and major care.
Item
33 amends the definition of minimum
annual rate of child support to pick up the relocated substantive meaning,
which will now be in subsection 66(5), rather than subsection 66(4).
Item
34 provides that the new term multi-case
allowance has the meaning given by section 47.
Item
35 provides that the new term multi-case
cap has the meaning given by section 55E.
Item 36
inserts a new definition of multi-case child costs, with a meaning drawn
from step 4 of the method statement in section 47.
Item
37 inserts a new definition of net
rental property loss to establish an income component that equals the
amount by which a parent’s gross expenses exceed gross income from rental
property for a particular year, or, if those expenses do not exceed that
income, equals nil.
Item
38 provides that the term non-parent
carer means a person who is an eligible carer of a child, but who is not
the parent of the child, such as, for example a grandparent. Eligible carer is
defined in section 7B.
Item
39 provides that the term parenting
plan has the meaning given by section 63C of the Family Law Act.
Item
40 inserts a new definition of a
parent’s pension PP (single) maximum basic amount. This is the sum of
the amounts that would have been payable to the parent as the maximum basic
rate and pension supplement if they were receiving parenting payment (single)
under the social security law.
Item
41 provides that the new term percentage
of care has the meaning given by section 48.
Item
42 provides that the new term regular
care has the meaning given by subsection 5(2).
Item
43 repeals and substitutes the
definition of relevant dependent child. The revised definition achieves
several things. Firstly, it recognises that a relevant dependent child is a
child who is not the subject of an assessment in respect of the costs of a
child. That is, the child is not a child in a child support case (even though
they may be taken into account in determining a relevant dependent child amount
under section 46). Secondly, it reflects the repeal from the Scheme of
the concept of major care, replacing it with a reference to ‘at least
shared care’. Thirdly, it recognises that a child may remain a relevant
dependent child until the last day of the secondary school year in which the
child turns 18. Lastly, it prevents double dipping by excluding a child
for whom the parent is assessed under the new costs of children arrangements.
Item
44 provides that the new term relevant
dependent child amount has the meaning given by section 46.
Items
45 and 47 repeal the now redundant
definitions of relevant partnered rate of Social Security pension and relevant
unpartnered rate of Social Security pension. The new definition of pension
PP (Single) maximum basic amount will now be sufficient.
Item
46 provides that the new term relevant
September quarter has the meaning given by subsection 5A(2).
Item 48
inserts a new definition of remaining period in relation to a parent who
has made an election under section 60. This definition supplements the new
rules under section 60.
Item
49 provides that the new term self-support
amount has the meaning given by section 45.
Item
50 provides that the new term shared
care has the meaning given by subsection 5(3).
Items
51 to 54 repeal the now redundant
definitions of shared care child, shared ongoing daily care, substantial
care and supplementary amount.
Item
55 inserts a new definition of target
foreign income, with meaning drawn from section 5B.
Item
56 inserts a new definition of taxable
income, with meaning drawn from sections 56 and 57.
Item
57 inserts a new definition of tax
free pension or benefit. This means one of several stipulated income
support payments to the extent that any of those payments is tax-exempt and is
not a payment by way of bereavement payment, pharmaceutical allowance, rent
assistance, language, literacy and numeracy supplement or remote area
allowance. This new definition will align the child support income
arrangements in this respect with the current arrangements for family tax
benefit.
Item
58 repeals the definition of yearly
equivalent of EAWE amount, which is not needed for the new Scheme.
Item
59 inserts new subsections 5(2) and
(3). Subsection 5(2) inserts a definition of regular care, which
provides that a person has regular care of a child if they have at least 14%,
but less than 35%, care of the child during a care period (see section
48). Subsection 5(3) inserts a definition of shared care, which
provides that a person has shared care of a child if they have at least 35%,
but no more than 65%, care of the child during a care period.
Item
60 inserts new sections 5A and 5B.
New section 5A contains the definition of annualised MTAWE figure. This
figure, for a relevant September quarter, is 52 times the published male total
average weekly earnings figure for all employees (however from time to time
described) for the reference period in the quarter. The relevant September
quarter is the quarter ending 30 September of the last calendar year
ending before the child support period in question begins and the reference
period in the quarter is the pay period officially stipulated for the purpose.
New section 5B contains the definition of target
foreign income. This definition will take the place of the exempt
foreign income definition in the current formula provisions. This is to ensure that, as
much as possible, consistent terminology is used both for family assistance law
and child support law. The definition of target foreign income is also
being aligned with the definition of target foreign income in the family
assistance law. Otherwise, there is no substantial difference.
Item
61 repeals and substitutes subsections
7A(2) and (3), relating to the meaning of a child support period. This
is to redraft the subsections into plainer English. No substantive change is
made, although a new note is added after paragraph (2)(d). The note points out
that, despite paragraph (2)(a) (which provides that a child support period
generally starts at the beginning of the day when an application for
administrative assessment is properly made under Part 4), a child support
period might not start if a non‑parent carer applies for administrative
assessment during a child support period – section 40B refers.
Item
62 repeals and substitutes
subsection 7B(1) to remove redundant concepts from the current subsection and
reflect instead the new criterion that an eligible carer must have at
least shared care of the child.
Item
63 repeals the now redundant
sections 8 and 8A.
Items
64 and 65 amend section 23 to
reflect the new application arrangements for administrative assessment, in
which there is no longer a distinction between eligible carer and liable parent
applicants – now, applications may be made simply by parents or non-parent
carers.
Item
66 follows through on the last point
by repealing and substituting sections 25 to 26A. Section 25 will allow a
parent of a child to apply for administrative assessment of child support for
the child as long as the application is for both parents to be assessed for the
costs of the child (thereby giving effect to the income shares approach to
child support recommended in the Taskforce Report), the two parents are not in
a domestic relationship with each other, and the specified requirements about
joint care situations and child welfare laws are met. A note points out that a
parent by whom child support is payable must be a resident of Australia on the
day the application is made (see new section 29A).
Section
25A allows a non-parent carer to apply for administrative assessment. The
basic rule in this case is that the non-parent carer must apply for both
parents to be assessed for the costs of the child. However, this rule will not
apply if one of several situations exists that means that one parent should not,
or cannot, be assessed for the costs of the child, as long as the non-parent
carer applies for the other parent to be assessed. The allowable situations
include when the first parent is not a resident of Australia, cannot be
located, or is deceased. The other rules about a non-parent carer application
are that the carer must not be in a domestic relationship with either parent
and the specified requirements about joint care situations and child welfare
laws are met. A note highlights that a parent by whom child support is payable
must be resident of Australia on the day the application is made (see new
section 29A).
Sections
26 and 26A are essentially reiterations of current sections 26 and 26A, but
reflecting the changed arrangements for applying for administrative assessment.
Items
67 to 69 amend section 28 to reflect
the changed arrangements for applying for administrative assessment and the
fact that the two or more children described in the section who may be included
in the same application form may be in different child support cases, given
that the concept of a child support case is now specifically recognised
in the legislation (see discussion above of the new definition of that term).
Item
70 amends subsection 29(2) to remove
reference to the redundant concept of a carer application.
Item
71 inserts new section 29A, which
has the effect that an application for administrative assessment under either
section 25 or 25A may not be made if a parent to be assessed under the
application for the costs of the child is not a resident of Australia when the
application is made and the Registrar is reasonably satisfied that child
support is likely to be payable by the parent. This is because an assessment
cannot be made for a parent to pay child support unless they are a resident of
Australia.
Item
72 repeals and substitutes section
31 to reflect the changed arrangements for applying for administrative
assessment. The section will have a more limited effect than currently, being
simply a requirement for the Registrar to assess one or both parents, as the
application requires, for the costs of the child and to assess the annual rate
of child support payable under Part 5 for the days in the child support period
starting when the application is made.
Item
73 repeals subsections 33(2) and
(3), relating to notices to be given if the Registrar refuses to accept an
application for administrative assessment, and substitutes them with subsection
(3). The new subsection (3) provides for the situation where the Registrar
refused to accept the application for reasons that include that the Registrar
was not satisfied that one of the people who was to have been assessed for the
costs of the child was a parent of the child. In this situation, the notice
must include, or be accompanied by, a statement to that effect that the
applicant may apply to a court having jurisdiction under the Child Support
Assessment Act for a declaration under section 106Athat the applicant is
entitled to an administrative assessment of child support for a child because
the other party is a parent of the child.
Item 74
repeals and substitutes section 34, relating to notices to be given if the
Registrar accepts an application for administrative assessment. The new
section merely reflects the changed arrangements for applying for
administrative assessment and for review by the Social Security Appeals
Tribunal. There is no substantive change.
Item
75 repeals and substitutes section
34A, relating to the Registrar’s obligation to make an assessment when a new
taxable income figure is available, to re-draft the provision in plain English,
without making any substantive change.
Item
76 repeals and substitutes section
34C, relating to the fact that administrative assessments for child support
periods are not started by an application or a new agreement. The new section
reflects changed arrangements for applying for administrative assessment,
focusing not on by or to whom the child support is payable, but simply on the
child support payable for the child.
Item
77 repeals and substitutes
paragraphs 83(1)(a) and (b), relating to people who may be parties to child
support agreements. In making this specification, the current provisions refer
back to the parties involved in an application for a child support assessment.
The new provisions preserve this link, and are revised simply to reflect the
changed arrangements for applying for administrative assessment.
Item
78 repeals and substitutes
subsection 98S(1) to reflect new concepts and terminology introduced by this
bill.
Item
79 repeals and substitutes
section 98SA. It states that the Registrar must not make a determination
under Part 6A that varies, or that has the effect of varying, the annual
rate of child support payable by a liable parent for all of the children in the
child support case that relates to the child in respect of whom the
determination is made to a rate below the minimum annual rate of child support
for the child support period, unless the liable parent has at least regular care
of at least one of the children in the child support case that relates to the
child.
Item
80 makes consequential amendments to
section 106A.
Items
81 and 83 amend section 107 to
reflect the changed arrangements for administrative assessment, including the
requirement to assess a parent for the costs of the child.
Item
84 amends paragraph 117(3B)(a) to
reflect the changed terminology from child support income amount to adjusted
taxable income, aligning with family tax benefit.
Item 85
repeals and substitutes subsection 118(1) to reflect new concepts and
terminology introduced by this bill.
Items
86 to 89 amend section 139 to
reflect the changed arrangements for administrative assessment, including the
requirement to assess a parent for the costs of the child.
Item
90 repeals paragraphs 150B(1)(b) and
(c) and substitutes a new paragraph (b) to reflect the changed arrangements for
administrative assessment, including the requirement to assess a parent for the
costs of the child.
Item
91 amends the note to subsection
150C(1) to reflect the changed terminology from child support income amount
to adjusted taxable income, aligning with family tax benefit.
Item
92 inserts new subsection 151B(1A).
A child is generally no longer an eligible child (a child for whom child
support may be paid) or a relevant dependent child (a child for whom a
parent may have a relevant dependent child amount, which decreases a parent’s
child support income when assessing the costs of the child support children)
from the day they turn 18. Although section 151B currently allows a carer
to apply for an administrative assessment for an eligible child to continue in
force until the last day of the secondary school year in which they turn 18,
there is no equivalent application allowed for a relevant dependent child.
Therefore, the treatment between eligible children (a parent’s first family)
and relevant dependent children (the parent’s second family) is inequitable,
which would be contrary to the general thrust of the reforms. The amendment in
this item corrects this inequity.
New
subsection 151B(1A) provides the desired equivalent rule for relevant
dependent children, so the parent may apply for an administrative assessment
that takes into account the parent’s relevant dependent child to continue in
force until the last day of the secondary school year in which the child
turns 18.
Item
93 repeals and substitutes paragraph
151B(2)(b) to reflect the changed arrangements for administrative assessment.
Item
94 complements the new rule, by
repealing and substituting paragraph 151C(2)(b). The extra element in new
paragraph (b) effectively requires the Registrar to accept an application under
new subsection 151B(1A) if satisfied that an administrative assessment, or
child support agreement, that takes the relevant dependent child into account
is in force, or is likely to be, on the day before the child turns 18.
Item 95
makes consequential amendments to section 151D (about the consequences of
acceptance of a continued administrative assessment application under section
151B) to restrict its operation to an application under the current subsection
151B(1) for in relation to an eligible child. Item 96 then inserts new
section 151E to provide equivalent consequences on acceptance of a continued
administrative assessment application under new subsection 151B(1A) in
relation to a relevant dependent child.
Item
97 inserts new section 153A,
providing one indexation mechanism for the purposes of subsection 65A(2)
(relating to the annual rate of child support payable by low income parents not
on income support), and subsection 66(5) (relating to the minimum annual
rate of child support) rather than including the indexation provision within
each of these subsections separately.
Item
98 repeals and substitutes sections
154 and 155, which currently requires the Registrar to publish certain figures
relevant to the child support formula in the Gazette. The new section updates
this requirement in light of new concepts and provisions introduced by this
bill. Some of the Gazettal requirements now fall on the Secretary, rather than
the Registrar, since they relate to core policy elements, rather than more
administrative matters. Subsection 155(3) provides that the instruments
published under this section are not legislative instruments. This provision
is included to assist readers, as the instrument is not a legislative
instrument within the meaning of section 5 of the Legislative Instruments
Act 2003.
Child
Support Registration and Collection Act
Items
99 to 110 are amendments of the
Child Support Registration and Collection Act.
Item
99 inserts a definition of
non-parent carer and provides that it has the same meaning as in section 5
of the Child Support Assessment Act.
Item
100 makes a consequential amendment
to subparagraphs 17(1)(a)(i) and (ii).
Item
101 repeals and substitutes
paragraph 24A(2)(c), which currently relieves the Registrar of the obligation
to register a liability arising from a child support assessment if the
assessment was made because of a liable parent application. The new paragraph
reflects the removal of the liable parent application concept, referring
instead to an application by the parent by whom child support is payable.
Item
102 makes a minor consequential
amendment to section 79B.
Item
103 repeals and substitutes
subsection 80(5) to reflect the changed arrangements for administrative
assessment, including the requirement to assess a parent for the costs of the
child.
Item
104 amends table item 4 in section
85 to reflect the changed arrangements for administrative assessment, including
the requirement to assess a parent for the costs of the child.
Items
105 to 107 amend sections 101, 102
and 103H to reflect the new concept of a non-parent carer.
Item 108
inserts new section 103VA, which provides that a party aggrieved by a
decision of the SSAT under Part VIIA of the Child Support Registration and
Collection Act, relating to a party’s percentage of care for a child to the
review, may apply to the AAT for a review of the decision.
Subsection 103VA(2) provides that the term decision has the same
meaning as in the Administrative Appeals Tribunal Act 1975.
Item
109 inserts new
subparagraph 103X(1)(a)(ii) to provide that if the SSAT makes a decision
on review that relates to a person’s percentage of care for a child, the party
may, subject to the Administrative Appeals Tribunal Act 1975, apply to
the AAT for review of the decision, and request a statement under
section 28 of that Act (except where subsection 28(4) of that Act
applies).
Item
110 makes a minor technical
amendment to subsection 103X(2).
Family
Law Act
Items
111 to 114 amend the Family Law Act.
Item
111 amends subsection 63G(5) to
reflect the changed arrangements for administrative assessment.
Item
112 repeals and substitutes
subsection 66E(1) to reflect the changed arrangements for administrative
assessment, including the requirement to assess a parent for the costs of the
child.
Items
113 and 114 amend subsections
66SA(1), 86(3B) and 87(4D) to reflect the changed arrangements for
administrative assessment of child support, including the requirement to assess
a parent for the costs of the child.
Part
2 – Application and saving provisions
Subitem
115(1) is an application provision
that provides that amendments made by Schedule 1, and this Schedule, apply
in relation to a day in a child support period that is a day that is on, or
after, the day on which this Schedule commences. Essentially, all child
support assessments will be reviewed prior to the commencement of the new
Scheme and new assessments will be made according to new Part 5 and take
effect from the commencement of new Part 5. However, this will not affect
child support periods, which will continue to run.
Subitem 115(2) provides that the amounts referred to in new
subsections 65A(2) (annual rate of child support payable by low income
parents not on income support) and 66(5) (minimum annual rate of child support)
of the Child Support Assessment Act are to be indexed in accordance with
section 153A of the Child Support Assessment Act after
30 December 2006 as if item 1 of Schedule 1 had commenced on
that day.
Item
116 is an application provision that
provides that the amendments made by items 1 and 2 of this Schedule
apply in relation to the 2008-2009 income year and later income years.
Item 117
deals with savings assessments in force prior to the commencement of the new
child support scheme.
Subitem
117(1) provides that the amendments
made by Schedule 1 do not affect the continuity of:
(a)
any administrative assessment, in
force immediately before this item commences, of the annual rate of child
support that is payable by a parent; or
(b)
any reduction, that is in force
immediately before this item commences, of an annual rate of child support
payable to nil under section 66A of the Child Support Assessment Act; or
(c)
any liability that arose under
section 77 of the Child Support Assessment Act before this item commences.
Subitem
117(2) provides that for the
purposes of the Child Support Assessment Act, if an election made by a person
under section 60 of that Act is in force immediately before this item
commences:
(a)
the election continues in force
for the remaining days in the child support period, despite the amendments made
by Schedule 1; and
(b)
the person is taken to have made
the election for the purposes of assessing the person in respect of the costs
of the child; and
(c)
the amount specified in the
relevant notice as the amount the person elects to be his or her child support
income amount is taken to be specified in the notice as his or her adjusted
taxable income; and
(d)
the amounts specified as amounts
estimated under steps 2 and 3 of the method statement in subsection 60(5) of
that Act, as in force immediately before this item commences, is taken to be
specified in the notice as the amount estimated under step 2 of the method
statement in subsection 60(5) of that Act, as in force immediately after this
item commences.
Subitem
117(3) provides that if a
Registrar determination under section 58 of the Child Support Assessment
Act is in force immediately before this item commences, the determination
continues in force despite the amendments made by Schedule 1.
Subitem
118(1) requires the Registrar to
publish in the Gazette the annual rate of child support specified in
subsection 65A(2) of the Child Support Assessment Act for all child
support periods that started in that calendar year or the previous calendar
year.
Subitem
118(1) requires the Registrar to
publish in the Gazette for all child support periods that started in that
calendar year or the previous calendar year:
- the
annualised MTAWE figure for the relevant September quarter;
- the
Costs of the Children Table, incorporating the annualised MTAWE figure for
the relevant September quarter and any other amounts in the items in the
table that can be worked out using the annualised MTAWE figure.
Subitem
118(3) notes that the instruments
published under subitems (1) and (2) are not legislative instruments under the Legislative
Instruments Act 2003, as the instrument is not a legislative instrument
within the meaning of section 5 of the Legislative Instruments Act 2003.
Schedule 3 – SSAT review of child support decisions
Summary
This
Schedule expands the role of the Social Security Appeals Tribunal to include
independent review of child support decisions, providing a review mechanism
that is inexpensive, fair, informal and quick.
Background
Presently,
if a carer or liable parent does not agree with a decision of the Child Support
Registrar, he or she may object through the internal objection procedure. If
the carer or liable parent is still dissatisfied with the decision, he or she
must generally appeal to a court with Family Law jurisdiction. A parent who
appeals to a court must bring their action against the other parent in an
adversarial process. The child support legislation makes the carer and the liable
parent, rather than the Child Support Registrar, parties to the appeal. This
is perceived to be an unfair aspect of the child support system. The court
process can be expensive and time consuming, as well as amplifying animosity
between separated parents. Consequently, external review of the Registrar’s
decisions is not often sought.
Schedule
3 introduces review by an independent external body, the Social Security
Appeals Tribunal (SSAT), of child support decisions which have been reviewed
under the Child Support Agency’s internal review procedure. The purpose of
introducing this is to provide external review mechanism which is faster, less
formal and less expensive than court action, while still providing just and
fair outcomes. The Registrar is the primary respondent to an application for
appeal, although the other parent is also a party (with the exception of
limited circumstances in which the outcome cannot affect the other parent). It
is an inquisitorial, rather than an adversarial, process, which may assist in
reducing tensions between separated parents when resolving child support
issues. Most of the current limited AAT appeals, relating to decisions
primarily affecting only one parent, will now be performed by the SSAT.
Parents,
and certain other people affected by a child support decision, may appeal a
decision of the SSAT to a court on a question of law. Parents can still appeal
directly to the courts, in a number of situations. These are applications
about the making of assessments requiring parentage declarations, applications
to terminate an agreement, applications for child support in a non-periodic
form, applications for urgent child support pending the making of an
assessment, and applications for departure determinations in some limited
circumstances, such as where the decision is too complex to be finalised
administratively, or the applicant seeks to vary a child support assessment
from more than 18 months ago.
SUSPENSION DETERMINATIONS – PENDING PARENTAGE DECLARATIONS
Subsection
79A(1) of the Child Support Registration and Collection Act is also amended to
provide that if the payer disputes the administrative assessment on the basis
that the payer is not a parent of the child, the Registrar, rather than having
a discretion to suspend payment to the payee, must make a suspension
determination. This is in order to minimise the effect of incorrect payments
in the event that the payer is found not to be the father. This change is part
of larger reforms to the process of applying parentage declarations for child
support purposes (see Schedule 4, under the heading ‘Parentage declarations
where the payer is not a parent of the child’).
Explanation of the changes
Part
1 – Amendments
Child
Support Assessment Act
Item
1 inserts into section 5 a
definition of final and provides that in relation to a court, it has the
meaning given by section 144.
Item
2 inserts into section 5 a
definition of the Child Support Registration and Collection Act.
Items
3 and 4 deal with changes to the
notification provisions to include reference to the appeal rights which will be
available after the internal review procedure.
Item
3repeals and substitutes section 33,
which deals with the notice to be given to a person whose application for
administrative assessment of child support was unsuccessful. Subsection 33(1)
provides that if the Registrar refuses to accept an application for
administrative assessment of child support for a child, the Registrar must
immediately notify the applicant in writing. It is identical to the current
subsection 33(1). Subsection 33(2) sets out the situations in which
subsection 33(3) applies. It provides that if the refusal to accept the
application was because the application failed to establish that the person
from whom the application sought child support is a parent of the child, then
the notice must include, or be accompanied by, a statement that this is the
reason for the refusal. Subsection 33(3) provides that the notice must
also state that the applicant may apply to a court under section 106A for
a declaration that the applicant is entitled to an administrative assessment
(or to have the Registrar reconsider the refusal of the application if other
reasons also applied) on the basis the person from whom child support was
sought is a parent of the child (see paragraph 33(3)(b)). Subsection
33(4) provides that if subsection 33(3) does not apply (that is, if the refusal
was on grounds other than failure to establish that the person from whom child
support was sought is a parent of the child), the notice must include, or be
accompanied by, a statement to the effect that:
(a)
the person may object to the
decision; and
(b)
if aggrieved by the later
decision, the person may apply to the SSAT for review of the later decision.
Subsection
33(5) provides that a contravention of subsection (3) or (4), for example, if
the notice does not state that the person may apply to the SSAT for review of
the decision, does not affect the validity of the decision to refuse the
application.
Item
4 repeals and substitutes subsection
34(2). Paragraph 34(2)(a) provides that a notice given when the Registrar
accepts the application, to a person from whom child support for a child is
sought must include, or be accompanied by, a statement to the effect that he or
she may apply to a court for a declaration that the applicant was not entitled
to administrative assessment of child support for the child because the person
is not a parent of the child. Paragraph 34(2)(b) provides that the notice
must include, or be accompanied by, a statement to the effect that the person
from whom, or to whom, the application sought payment of child support may
object to the decision (other than on the ground that the person is not a
parent of the child) (see subparagraph 34(2)(b)(ii)), and .if aggrieved
by a later decision on an objection, no matter who lodged the objection, that
person may apply to the SSAT (see subparagraph 34(2)(b)(iii). This
ensures that if the other party lodged the objection, and the matter is
resolved to that person’s satisfaction, the person referred to in subparagraph
34(2)(b)(iii) does not lose his or her right to apply to the SSAT for review of
the decision.
The
following items reflect consequential changes resulting from the consolidation
of the provisions relating to internal review of the
Child Support Assessment Act with those in the Child Support
Registration and Collection Act, and the changed external review procedures
generally substituting the SSAT for the courts and AAT.
Item
5 amends subsection 60A(3) by
omitting the words ‘Part 6B and section 110’ and substituting the words
‘Parts VII, VIIA and VIII of the Registration and Collection Act’. This change
is required because provisions relating to the internal objections procedure
for assessments are being moved from the Child Support Assessment Act to the
Child Support Registration and Collection Act.
Item
6 repeals and substitutes subsection
60B(2). It provides that the notice must include, or be accompanied by, a
statement to the effect that:
(a)
the person may object to the
decision; and
(b)
if aggrieved by the later
decision, the person may apply to the SSAT for review of the later decision.
The
current paragraph 60B(2)(b) provides that the notice must state that the person
can appeal to a court. This change in paragraph 60B(2)(b) to refer to the
SSAT reflects that the SSAT and not a court will first review decisions. New
subsection 60B(3) provides that a contravention of subsection 60B(2), for
example, if notice does not set out that a person may apply to the SSAT, does
not affect the validity of the decision.
Item
7 repeals and substitutes subsection
64A(6). It provides that the notice must include, or be accompanied by, a
statement to the effect that:
(a)
the person may object to the
decision; and
(b)
if aggrieved by the later
decision, the person may apply to the SSAT for review of the later decision.
New
paragraph 65A(6)(c), which provides that a notice given to a person must state
that if a person is aggrieved by a decision, he or she may apply to the SSAT
for review of a decision. This replaces a reference to a person being notified
that he or she may apply to the AAT for a review of the decision.
Item
8 repeals and substitutes subsection
66C(2). It provides that the notice must include, or be accompanied by, a
statement to the effect that:
(a)
the person may object to the
decision; and
(b)
if aggrieved by the later
decision, the person may apply to the SSAT for review of the later decision.
The
current paragraph 66C(2)(b) provides that the notice must state that the person
can appeal to a court. New paragraph 66C(2)(b) reflects that the SSAT and
not a court will first review decisions. New subsection 66C(3) provides that a
contravention of subsection 66C(2), for example, if the notice does not refer
to a person’s right to apply to the SSAT, does not affect the validity of the
decision.
Item
9 omits from subsection 70(1) the
words ‘Division 3 of Part 7’ and substitutes the words ‘Part VIIA or
Subdivision 3 of Part VIII of the Registration and Collection Act’.
Item
10 omits from section 72 the words
‘Division 3 of Part 7’ and substitutes the words ‘Part VIIA or Subdivision B of
Division 3 of Part VIII of the Registration and Collection Act’.
Item
11 omits from subparagraph
76(3)(a)(i) the words ‘this Act’ and substitutes the words ‘the Registration
and Collection Act’.
Item
12 repeals subparagraph 76(3)(a)(ii)
and substitutes it with a new subparagraph 76(3)(a)(ii), which provides that a
notice of assessment must include a notice which provides that if a parent or
liable carer is aggrieved by a decision on an objection (no matter who lodges
the objection), he or she may apply to the SSAT for a review of the decision.
This ensures that if the other party lodged the objection, and the matter is
resolved to that person’s satisfaction, the person referred to in
subparagraph 76(3)(a)(ii) does not lose his or her right to apply to the
SSAT for review of the decision. The current subparagraph 76(3)(a)(ii)
provides that the notice must state that the person can appeal to a court.
This change reflects that the SSAT and not a court will first review decisions.
Item
13 repeals and substitutes
subsection 96(2). It provides that the notice must include, or be accompanied
by, a statement that specifically draws the attention of the parties to the
right:
(a)
to object to the decision; and
(b)
if aggrieved by the later
decision (no matter who lodges the objection), the person may apply to the SSAT
for review of the later decision.
New
paragraph 96(2)(b) provides that if the applicant is aggrieved by a decision,
he or she may apply to the SSAT for review of the decision. The current paragraph
66C(2)(b) provides that the notice must state that the person can appeal to a
court. This change reflects that the SSAT and not a court will first review
decisions.
Item
14 repeals and substitutes section
98JA. New subsection 98JA(1) provides that if the Registrar refuses to make a
determination, the Registrar must serve notice in writing on each of the
parties to the proceeding. Current subsection 98JA(1) only requires the
Registrar to serve notice on the applicant. New subsection 98JA(2) sets out
that a notice must include, or be accompanied by, a statement to the effect:
(a)
that the party may object to the
decision; and
(b)
that if the party is aggrieved by
a later decision on an objection to the original decision (no matter who lodges
the objection), the party may:
(i)
if the original decision was made
under section 98E (issues too complex to be determined
administratively)—apply to a court having jurisdiction under this Act for an
order under Division 4 of Part 7; or
(ii)
otherwise—apply, subject to the
Child Support Registration and Collection Act, to the SSAT for review of the
later decision.
Paragraph
98JA(2)(b) ensures that if the other party lodged the objection, and the matter
is resolved to that person’s satisfaction, the person referred to in paragraph
98JA(2)(b) does not lose his or her right to apply to a court or the SSAT for
review of the decision. New subsection 98JA(3) provides that a contravention
of subsection 98JA(2), for example, if the notice does not set out that a person
may apply to the SSAT for review of the decision, does not affect the validity
of the decision.
Item
15 inserts at the end of Division 3
of Part 6A a new subsection 98RA. Like section 98JA (see item 18) it
deals with the appeals process in relation to matters which are too complex for
the Registrar to deal with administratively. New subsection 98JR(1) provides
that if, after having notified the parties under section 98M, the
Registrar decides not to make a determination, the Registrar must serve notice
in writing on each of the parties to the proceeding.
Subsection
98RA(2) sets out that a notice must include, or be accompanied by, a statement
to the effect:
(a)
that the party may object to the
decision; and
(b)
that if the party is aggrieved by
a later decision on an objection to the original decision (no matter who lodges
the objection), the party may:
(i)
if the original decision was made
under section 98E (issues too complex to be determined administratively)—apply
to a court having jurisdiction under this Act for an order under
Division 4 of Part 7; or
(ii)
otherwise—apply, subject to the
Child Support Registration and Collection Act, to the SSAT for review of the
later decision.
Paragraph
98RA(2)(b) ensures that if the other party lodged the objection, and the matter
is resolved to that person’s satisfaction, the person referred to in paragraph
98RA(2)(b) does not lose his or her right to apply to a court or the SSAT for
review of the decision. New subsection 98RA(3) provides that a contravention
of subsection 98RA(2), for example, if the notice does not mention a person’s
right to apply to the SSAT for review of a decision, does not affect the
validity of the decision.
Item
16 repeals Part 6B. This is because
the internal objections procedure is being moved from the Child Support
Assessment Act to the Child Support Registration and Collection Act, and review
by the AAT of certain decisions is being replaced by review by the SSAT.
Item
17 amends Part 7 by repealing the
heading and substituting ‘Part 7 – Court review of certain
decisions’. Amendments are made to reflect generally the more limited
jurisdiction of the courts under the Acts, based on substitution of the SSAT as
the first point of external review.
Part
7 – Court review of certain decisions
Item
18 inserts the following before
Division 1 of Part 7:
Division
1A – Preliminary
New
section 98W sets out a simplified outline of Part 7, including setting out the
jurisdiction of courts, the process for reviewing decisions, and the orders and
declarations the court may make.
Item
19 amends Division 1 of Part 7 by
repealing and substituting the heading.
Division 1 – Jurisdiction of courts
Item
20 inserts before section 99 a new
section 98X, which sets out a simplified outline of Division 1.
Item
21 amends Division 2 of Part 7
repealing the heading and substituting ‘Division 2 – Entitlement to
administrative assessment’. This change is required because Division 2 will
only deal with declarations about whether a child support assessment can or
cannot be made, based on a court making a parentage declaration. The other
matters that are presently dealt with by Division 2, for example, that a person
from whom an application sought payment of child support was not resident in
Australia on the day the application was made, will be dealt with by the
internal objections procedure, and then review by the SSAT or courts.
Division
2 – Entitlement to administrative assessment
Item
22 repeals and substitutes sections
106 and 106A. New section 106 is a simplified outline of Division 1.
New
section 106A deals with applications requiring parentage declarations by
unsuccessful carer applicants.
Subsection
106A(1) provides that that section 106A applies if the Registrar refuses to
accept from an applicant a carer application for administrative assessment of
child support, and one of the reasons for the Registrar so refusing was that
the person from whom the application sought payment was not a parent of the
child.
Applications
for declarations
Subsection
106A(2) provides that the applicant may apply to a court having jurisdiction
under this Act for a declaration that:
(a)
if the reason referred to in paragraph 106A(1)(b)
(that is, that the that Registrar was not satisfied under section 29 that the
person from whom the application sought payment of child support is a parent of
the child) was the only reason for the
Registrar refusing to accept the application—the applicant is entitled to an
administrative assessment of child support for the child because the person
from whom the application sought payment of child support is a parent of the
child; and
(b)
if the reason referred to in
paragraph (1)(b) was one of the reasons for the Registrar refusing to
accept the application—the applicant is entitled to have the Registrar
reconsider the application under Division 2 of Part 4 because the
person from whom the application sought payment of child support is a parent of
the child.
Subsection
106A(3) provides that the application must be made within the time prescribed
by the Rules of Court, or such further time is allowed by the Rules of Court.
Parties
Subsection
106A(4) sets out that, subject to the Registrar’s right to intervene in
proceedings, the parties to the proceeding are the applicant and the person
from whom the application sought payment of child support.
Declarations
Subsection
106A(5) provides that the court may grant the declaration if the court is
satisfied that:
(a)
if the reason referred to in
paragraph (1)(b) (that is, that the Registrar was not satisfied under section
29 that the person from whom the application sought payment of child support is
a parent of the child) was the only
reason for the Registrar refusing to accept the application—the person is
entitled to administrative assessment of child support because the person from
whom the application sought payment of child support is a parent of the child;
or
(b)
if the reason referred to in
paragraph (1)(b) was one of the reasons for the Registrar refusing to accept
the application—the applicant is entitled to have the Registrar reconsider the
application under Division 2 of Part 4 because the person from whom the
application sought payment of child support is a parent of the child.
Subsection 106A(6)
provides that if the court grants the declaration:
(a)
if the reason referred to in
paragraph 106A(1)(b), that is, that the Registrar was not satisfied under
section 29 that the person from whom the application sought payment of
child support is a parent of the child, was the only reason for the Registrar
refusing to accept the application—the Registrar is taken to have accepted the
application for administrative assessment of child support; and
(b)
if the reason referred to in
paragraph 106A(1)(b) was one of the reasons for the Registrar refusing to
accept the application—the Registrar must reconsider the application under
Division 2 of Part 4 (decision on application).
If,
as a result of the reconsideration, the Registrar refuses to accept the
application on other grounds, the application may be reviewed through the
internal review process, and then proceed to review by the SSAT or a court (see
item 3 above).
The
following items limit the scope of declarations by a court that an assessment
should not have been under section 107, to parentage issues.
Item
23 adds at the end of subsection
107(1) the words ‘on the grounds that the person is not a parent of the child
concerned’. It also adds a note that explains that the heading to
section 107 is replaced with a new heading: ‘Declaration that a person is
not entitled to administrative assessment’.
Item
24 repeals subsections 107(1A) and
(1B) and substitutes a new subsection 107(1A). New subsection 107(1A) provides
that a person from whom an application sought payment of child support must not
apply for a declaration in respect of a child if a court has already declared
under section 106A that the applicant was entitled to an administrative
assessment of child support for the child, or to have the Registrar
reconsider an application, because
the person is a parent of the child. A note following subsection 107(1A)
explains that in that case, the person may be able to appeal against the
declaration under Division 1 of Part 7.
Item
25 repeals and substitutes
subsection 107(4). New subsection 107(4) provides that the court may grant the
declaration if the court is satisfied that the applicant was not entitled to an
administrative assessment of child support for the child because the person
from whom the application sought payment was not a parent of the child.
Current subsection 107(4) provides that the court may also make such a
declaration if it is satisfied that the person was not a resident of
Australia. However, as Division 2 now only deals with parentage declarations,
and review of residency decisions will be by the SSAT, this aspect of current
subsection 107(4) is no longer relevant.
Item
26 repeals paragraph 109(2)(b).
This paragraph is being repealed because the only grounds for application under
section 107, to which paragraph 109(2)(a) refers and which is the first limb of
satisfying subsection 109(2), is that the person was not a parent of a
child concerned. Paragraph 109(2)(b) is, therefore, unnecessary.
Item
27 amends Division 6 of Part 7 by
repealing the heading and substituting ‘Division 6 – Setting aside accepted
child support agreements’.
Division
6 – Setting aside accepted child support agreements
Item
28 repeals Subdivision A of Division
6 of Part 7. This Subdivision deals with appeals to the court against
acceptance or non-acceptance of agreements. It is being repealed because a
decision of the Registrar in relation to acceptance or non-acceptance of child
support agreements will become decisions which are appealable to the SSAT (see
item 13 of the table in section 80 in item 73). A person will then be
able to appeal a decision of the SSAT in relation to the acceptance or
non-acceptance of an agreement to a court on a question of law.
Item
29 amends Subdivision B of Division
6 of Part 7 by repealing the heading.
Item
30 inserts before section 136 a new
section 135, which is a simplified outline of Division 6.
Item
31 omits from section 138 the word
‘Subdivision’ and substitutes it with ‘Division’. This corrects an incorrect
reference.
Item
32 inserts before section 139 a new
section 138A, which is a simplified outline of Division 6.
Item
33 repeals and substitutes paragraph
139(2A)(d). Paragraphs 139(2A)(d) and (e) set out when a court’s urgent
maintenance order ceases to have effect.
Paragraph 139(2A)(d)
provides that if a decision of the Registrar does not become final, and one of
the reasons for the Registrar refusing to accept the application for
administrative assessment was that the Registrar was not satisfied under
section 29 that the person was a parent of the child, an urgent
maintenance order by the court ceases to have effect at the time when a court
finally decides (whether under section 106A or on appeal from a decision
of a court under that section) that the person from whom the application sought
payment of child support is not a parent of the child.
Paragraph 139(2A)(e)
provides that in any other case, for example, if the proposed payer was not an
Australian resident, the court order ceases to have effect when a decision of
the SSAT, or of a court, deciding that the applicant was not entitled to
administrative assessment of child support, becomes final.
Item
34 repeals and substitutes
subsection 139(2B). New subsection 139(2B) provides that a decision of
the Registrar refusing to accept an application for administrative assessment
of child support becomes final if an application to a court under
section 106A (declarations of entitlement to administrative assessment) or
to the SSAT is not made within the time period for doing so. A note at the end
of subsection 139(2B) explains that subsection 110W(1) of the Child Support
Registration and Collection Act sets out when decisions of the SSAT become
final.
Item
35 inserts before section 141 a new
section 140A, which sets out a simplified outline of Division 8.
Item
36 inserts before section 144 a new
section 143A, which sets out a simplified outline of Division 9.
Item
37 repeals and substitutes
subsection 151C(5). New subsection 151C(5) provides that a notice to a
person in relation to the Registrar’s decision about an application for
assessment/agreement to continue beyond a child’s eighteenth birthday must
include, or be accompanied by, a statement to the effect that:
It
provides that the notice must include, or be accompanied by, a statement to the
effect that:
(a)
the person may object to the
decision; and
(b)
if aggrieved by the later
decision on an objection, (no matter who lodges the objection), the person may
apply to the SSAT for review of the later decision.
Paragraph 151C(5)(b)
ensures that if the other party lodged the objection, and the matter is
resolved to that person’s satisfaction, the person referred to in
paragraph 151C(5)(b) does not lose his or her right to apply to the SSAT
for review of the decision.
Child
Support Registration and Collection Act
Item
38 omits from the title the word
‘related’ and substitutes ‘other’, reflecting the increased scope of the Child
Support Registration and Collection Act, which will now provide for both
internal review (objections) and external review (generally SSAT appeals) of
decisions of the child support registrar. Various consequential amendments are
necessary to ensure all relevant concepts are defined, and links to the Child
Support Assessment Act are made.
Item
39 inserts into subsection 4(1) a
definition of the term AAT, which is defined as the Administrative
Appeals Tribunal.
Item
40 inserts into subsection 4(1) a
definition of the term administrative assessment, which is defined as
having the same meaning as in the Child Support Assessment Act.
Item
41 inserts into subsection 4(1) a
definition of appealable collection refusal decision. It defines
appealable collection refusal decision as a decision resulting in the failure
of the Registrar to collect an amount payable under an enforceable maintenance
liability. These decisions are amounts that have become due and payable and
remained unpaid for at least six months if proceedings for recovery have not
been instituted in a court, or proceedings for recovery have been instituted
and at least three months have passed since those proceedings were instituted.
Item
42 amends the definition of appealable
refusal decision in subsection 4(1) by adding at the end of paragraphs
(a), (aaa), (aa), (b), (ba) and (bb) the word ‘or’. This is to clarify that
these paragraphs are alternatives, and do not need to be satisfied
cumulatively.
Item
43 omits from the definition of appealable
refusal decision in subsection 4(1) the words ‘section 71 or 71A’ and
substitutes ‘section 71, 71A or 71C’. This amendment ensures that payer, as
well as a payee, can object to the Registrar’s decision to refuse to credit an
amount under section 71C. The amendments in 1998 to subparagraph 84A(1)(a)
allowed a payee to object to the Registrar’s decision to refuse to credit an
amount under section 71C. The 2001 amendments to the child support law
should have extended this to the payer also. The present amendment corrects
this.
Item
44 amends the definition of appealable
refusal decision in subsection 4(1) by adding at the end of paragraph
(c) the word ‘or’. This is to clarify that these paragraphs are alternatives,
and do not have to be satisfied cumulatively.
Item
45 amends the definition of appealable
refusal decision in subsection 4(1) by repealing paragraphs (d) and
(e), because this concept has now been included as an appealable collection
refusal decision.
Item
46 inserts into subsection 4(1) a
definition of Assessment Act and provides that it means the Child
Support Assessment Act.
Item
47 amends the paragraph (a) of the
definition of court order in subsection 4(1) by inserting the words
‘this Act,’ before the words ‘the Child Support (Assessment) Act 1989’.
Item
48 inserts into subsection 4(1) a
definition of final, and provides that in relation to a decision of the
SSAT, it has the meaning given by subsection 110W(1), and in relation a
decision of the court, it has the meaning given by subsections 110W(2) and (3).
Item
49 inserts into subsection 4(1) a
definition of reconsideration and provides that it has the meaning given
by section 110Q.
Item
50 inserts into subsection 4(1) a
definition of resumption determination and provides that it means a
determination made by the Registrar under subsection 79A(3) or 79B(3).
Item
51 inserts into subsection 4(1) a
definition of SSAT and provides that it means the Social Security
Appeals Tribunal.
Item
52 inserts into subsection 4(1) a
definition of SSAT Executive Director and provides that it means the
Executive Director of the SSAT.
Item
53 inserts into subsection 4(1) a
definition of suspension determination and provides that it means a
determination made by the Registrar under subsection 79A(1) or 79B(1).
Item
54 amends subsection 4(1) by
repealing the definition of Tribunal. This definition is no longer
accurate because it refers only to the AAT.
Item
55 repeals and substitutes paragraph
4(4)(a). New paragraph 4(4)(a) refers to the Registrar being required to do
something under a number of sections listed in the paragraph. Current
paragraph 4(4)(a) refers to the Registrar being required to do something
referred to in paragraph (a), (b) or (d) of the definition of appealable
refusal decision in subsection 4(1). However, as paragraph (d) of the
definition of appealable refusal decision is being repealed (see item
45), this change ensures that paragraph 4(4)(a) still has its intended
effect in relation to the sections listed.
Items
56 and 57 omit from subsection 7(3)
two references to ‘and the Tribunal’ and substitutes the words ‘the SSAT or the
AAT’. This change is required to ensure that the SSAT is also subject to the
restrictions and has powers imposed or created by any corresponding State laws.
Item
58 amends paragraphs 23(1)(a),
33(1)(a), and 37(a) by inserting before the words ‘the Child Support
(Assessment) Act 1989’ the words ‘this Act,’. These changes are required
because many of the powers of a court to review child support decisions are now
set out in Child Support Registration and Collection Act, as well as in the Child
Support Assessment Act.
Currently,
the Registrar is not required to inform affected parties of many registration
decisions. Division 4 is amended to ensure that notice is given, and to
substitute notification of application for review to the SSAT for the previous
court application.
Item
59 inserts at the end of Part III a
new Division:
Division
4 - Notices in respect of registration decisions
New
section 42C provides that notices must be given to payers and payees in
relation to registration decisions. In particular, subsections 42C(1), (2) and
(3) provide that the Registrar must, as soon as practicable after registering,
varying the particulars of, or deleting, a registrable maintenance liability in
the Child Support Register, or making an appealable refusal decision in
relation to a registrable maintenance liability, serve a notice on the payer
and payee. In relation to registering or varying particulars, the Registrar is
not required to serve a notice under the Child Support Registration and
Collection Act if he or she has already done so under the Child Support
Assessment Act. Subsection 42C(4) sets out that these notices must include, or
be accompanied by, a statement to the effect that:
(a)
the person may object to the
particulars of the assessment; and
(b)
if dissatisfied by a later
decision of the Registrar on an objection to the original decision (no matter
who lodges the objection), apply to the SSAT for review of the later decision.
Paragraph
42C(4)(b) ensures that if the other party lodged the objection, and the matter
is resolved to that person’s satisfaction, the person referred to in paragraph
42C(4)(b) does not lose his or her right to apply to the SSAT for review of the
decision. New subsection 42C(5) provides that a contravention of subsection
42C(4), for example, if the notice does not set out that a person may apply to
the SSAT for review of a decision, does not affect the validity of the
decision.
Item
60 repeals and substitutes
subsection 54(3). New subsection 54(3) provides that if the Registrar makes a
decision under subsection 54(1) or (2) to remit only part of a penalty or not
to remit any part of a penalty, the Registrar must serve notice on the person
by whom the penalty is, or but for the remission would be, payable. Current
subsection 54(3) only applies to amounts payable under subsection 54(2),
meaning that the change in this item extends the operation of subsection
54(3). Subsection 42C(4) sets out that these notices must include, or be
accompanied by, a statement to the effect that:
(a)
the applicant may object to the
particulars of the assessment; and
(b)
if dissatisfied by a later
decision of the Registrar on an objection to the original decision, apply to the
SSAT for review of the later decision.
New
subsection 54(5) provides that a contravention of subsection 54(4), for
example, if the notice does not set out that a person may apply to the SSAT for
review of a decision, does not affect the validity of the decision.
Item
61 omits from section 68 the words
‘where’ and substitutes ‘(1) If’. This is required because of the addition of
subsections to section 68.
Item
62 adds at the end of paragraph
68(a) the word ‘or’. This clarifies that paragraphs 68(a) and (b) are
alternatives and are not intended to be satisfied cumulatively.
Item
63 adds at the end of subparagraph
68(b)(i) the word ‘and’. This clarified that the various subparagraphs of
paragraph 68(b) are intended to be read cumulatively.
Item
64 adds at the end of section 68 new
subsections 68(2) and (3). New subsection 68(2) provides that if the Registrar
makes a decision under subsection 68(1), in relation to a late payment penalty,
to remit only part of a penalty or not to remit any part of a penalty, the
Registrar must serve notice on the person by whom the penalty is, or but for
the remission would be, payable. Subsection 68(3) sets out that these notices
must include, or be accompanied by, a statement to the effect that:
(a)
the person may object to the
particulars of the assessment; and
(b)
if dissatisfied by a later
decision of the Registrar on an objection to the original decision, apply to
the SSAT for review of the later decision.
New
subsection 68(4) provides that a contravention of subsection 68(3), that is, if
there is, for example, an error in the notice, does not affect the validity of
the decision.
Item 65
inserts after section 71D a new section 71E. It provides that notices must be
given to payees and payers in relation to registration decisions. Section 71E
is being inserted because currently, the Child Support Registration and
Collection Act does require the Registrar to give notices in relation to the
crediting of non-agency payments. As these notices are the basis for people
knowing about, and being able to object to, a decision (see new section 80), it
is important that these notices are provided.
Subsection 71E(1)
provides that section 71E applies if the Registrar decides to credit,
under section 71, 71A or 71C, an amount received by the payee of an enforceable
maintenance liability against the liability of the payer of that enforceable
maintenance liability, or received by a third party.
Subsection 71E(2)
provides that as soon as practicable after the Registrar credits the amount,
the Registrar must serve a notice in writing of the decision on the payee and
the payer.
Subsection 71E(3)
sets out the content of notices. It provides that a notice must include, or be
accompanied by, a statement to the effect that:
(a)
the applicant may object to the
particulars of the assessment; and
(b)
if dissatisfied by a later
decision of the Registrar on an objection to the original decision (no matter
who lodges the objection), apply to the SSAT for review of the later decision.
Paragraph
71E(3)(b) ensures that if the other party lodged the objection, and the matter
is resolved to that person’s satisfaction, the person referred to in paragraph
71E(3)(b) does not lose his or her right to apply to the SSAT for review of the
decision.
New
subsection 71E(4) provides that a contravention of subsection 42C(4), for
example, if the notice does not set out that a person may apply to the SSAT for
review of a decision, does not affect the validity of the decision.
Item
66 makes a minor technical amendment
to section 79A.
Item
67 inserts before section 79A a
heading:
Division
3 – Suspension determinations
Item
68 repeals and substitutes section
79A. Currently, section 79A of the Child Support Registration and
Collection Act provides that the Registrar may make a determination
suspending a payee’s entitlement to be paid collected amounts where the payer
has made an application under section 107 of the Child Support Assessment
Act seeking a declaration that the assessment should not have been issued. New
subsection 79A(1) provides that if the payer has made an application under
section 107 for a declaration that the payer is not a parent of the child, and
the application is pending, the Registrar, rather than having a discretion to
suspend payment, must make a suspension determination. This change is in order
to minimise the effect of incorrect payments in the event that the payer is
found not to be the father.
New
subsection 79A(2) provides that if the Registrar makes a suspension
determination on a day, the payee is not entitled to be paid an amount from
that payer for the child unless and until the Registrar makes a resumption
determination under subsection 79A(3). Two notes following
subsection 79A(2) explain several other consequences which flow if the
payer is found not to be a parent, and if the Registrar makes a suspension
determination.
New
subsection 79A(3) provides that if the Registrar has made a suspension
determination, and is satisfied that the payer’s application for a parentage
declaration has been finally refused by the court, withdrawn or struck out, the
Registrar must make a resumption determination. A resumption determination
provides that the payee is again entitled to be paid an amount from the payer,
and if any amounts were not paid because of the suspension determination, then
the payee is entitled to be paid the arrears. A note following
subsection 79A(3) explains that the Registrar must vary the
Child Support Register after making the resumption determination in
accordance with section 79C.
Item
68 also inserts a new section 79B,
which deals with suspension determinations if review by a court or the SSAT of
the payee’s entitlement to administrative assessment is pending.
Subsection 79B(1) provides that the Registrar may make a determination (a
suspension determination) that a payee of a registered maintenance liability in
relation to a child is not entitled under subsection 76(1) to be paid an
amount that is payable for the child by the payer of the liability if:
(a)
if following proceeding has been
brought by the payer under table item 9 of the table in subsection 80(1)
(that is, to accept an application for administrative assessment under
subsection 30(1)), and the proceeding is pending:
(i)
a proceeding that the child was
not a child in relation to whom the application for administrative assessment
was entitled to be made;
(ii)
a proceeding that the applicant
was not a person entitled to make an application for the child;
(iii)
a proceeding that the person from
whom the application sought payment was not a resident of Australia;
(b)
a proceeding has been brought by
the payer under Subdivision B of Division 3 of Part VIII (court review) in
relation to the payee’s entitlement to administrative assessment of child
support and the proceeding is pending under that Subdivision.
Subsection 79B(2)
provides that if the Registrar makes a suspension determination on a day, the
payee is not entitled to be paid an amount from that payer for the child unless
and until the Registrar makes a resumption determination under subsection
79B(3). Two notes following subsection 79B(2) explain several other
consequences which flow if the payee is found not to be entitled to assessment,
and if the Registrar makes a suspension determination.
New
subsection 79B(3) provides that if the Registrar has made a suspension
determination, and is satisfied that the payer’s application has been finally
refused by the court, withdrawn or struck out, the Registrar must make a
resumption determination. A resumption determination provides that the payee
is again entitled to be paid an amount from the payer, and if any amounts were
not paid because of the suspension determination, then the payee is entitled to
be paid that amount. A note following subsection 79B(3) explains that the Registrar
must vary the Child Support Register after making the resumption determination in
accordance with section 79C.
Item
68 also inserts a new section 79C.
It deals with varying particulars after a suspension or resumption
determination is made. Subsections 79C(1) and (2) provide that
immediately after making either a suspension or a resumption determination, the
Registrar must vary the Child Support Register in whatever way that the
Registrar considers necessary or desirable to give effect to the
determination. A note following subsection 72C(1) explains that as soon
as practicable after varying particulars under subsection 72C(1), the
Registrar must serve a notice under section 42C.
Item
69 repeals and substitutes Part
VII.
Part
VII - Internal objections procedures for certain decisions
This
new Part VII includes provisions relating to internal review which have been
transferred from the Child Support Assessment Act, and consolidates them with
provisions about the internal review procedure contained in the Child Support
Registration and Collection Act. The objections rights, both in relation to
the decisions which may be reviewed, and the parties who may apply for such
review, are largely unchanged.
Division
1 - Preliminary
New
section 79D sets out a simplified outline of Part VII.
New
section 79E sets out that the objects of Part VII are to provide for internal
reconsideration of decisions of the Registrar before the decisions may be
reviewed by the SSAT under Part VIIA.
Division
2 - Decisions against which objection may be lodged
A
table in subsection 80(1) sets out the decisions against which objection
may be lodged, and who may object to that decision. Subsection 80(2)
provides that an objection to a decision of the Registrar as to particulars
entered in the Child Support Register in relation to a registrable maintenance
liability may be lodged on the ground that the relevant entry does not relate
to a registrable maintenance liability, or on any other ground.
Subsection 80(3)
provides that an objection to a decision of the Registrar as to particulars
entered in the Child Support Register in relation to a registrable maintenance
liability may only be made against the particulars varied, and any other
particulars affected by the variation.
Subsection 80(4)
provides that an objection to a decision of the Registrar to accept an
application for administrative assessment under the Child Support Assessment
Act may not be lodged on the ground that the person is not the parent of the
child concerned. A note following subsection 80(4) explains that an
application for a parentage declaration may be made under section 107 of the
Child Support Assessment Act.
Subsection 80(5)
provides that an objection to a decision of the Registrar to refuse to accept
an application for administrative assessment under the Child Support Assessment
Act may not be lodged on the ground that the person is not the parent of the
child concerned. A note following subsection 80(5) explains that an
application for a parentage declaration may be made under section 106A.
Division
3 - Time limits on lodging objections
New
section 81 deals with time limits on lodging objections. Subsection 81(1)
provides that an objection to a decision (other than an objection to an
appealable collection refusal decision) must be lodged by a person within
28 days after that written notice is served on the person
Subsection
81(2) provides that an objection to an appealable collection refusal decision
must be lodged within 28 days after the decision first comes to the notice of
the person. This difference in time limits on objections between appealable
collection refusal decisions and other decisions arises because the Registrar
will notify a person of all decisions other than an appealable collection
refusal decision. However, an appealable collection refusal decision is
defined as a decision resulting in a failure to collect an amount payable (see item
41). Consequently, a person would only become aware of an appealable
collection refusal decision through means other than a notice from the
Registrar. That is, a person would become aware through the Registrar’s
failure to recover and disburse the uncollected child support.
New
section 82 deals with applications for extensions of time.
Subsection 82(1) provides that even if the period for the lodging an
objection under section 81 has ended, the person may send the objection to the
Registrar together with an application in writing requesting the Registrar to
treat the objection as having been duly lodged. Subsection 82(2) provides
that the application must state fully and in detail the grounds of the
application, including why the person failed to lodge the objection as required
by section 81.
New
section 83 deals with consideration of applications for extensions of time for
lodging objections. Subsection 83(1) provides that if an application is
sent to the Registrar under section 82 in relation to an objection under Part
VII, the Registrar must consider the application, and within 60 days, either
grant or refuse the application, and if it is granted, deal with the objection
under subsection 87(1). Subsection 83(2) is a deeming provisions, and
provides that if the Registrar does not either grant or refuse to grant the
application within 60 days, the Registrar is taken to have refused to grant the
application. Subsection 83(3) provides that the Registrar must serve
notice in writing of the decision on the person who made the application. Subsection 83(4)
provides that the notice must include, or be accompanied by, the reasons for
the decision, and a statement to the effect that if the person is aggrieved by
the decision, he or she may apply to the SSAT for review of the decision. The
provision of reasons for the decision will assist people in deciding whether or
not they wish to apply to the SSAT for review of the decision.
Subsection 83(5) provides that a contravention of subsection 83(4),
for example, if the Registrar fails to send a notice, does not affect the
validity of the decision. Subsection 83(6) provides that if an
application made under subsection 82(1) is granted, the person who made
the application is taken to have duly lodged the objection to which the
application relates.
Division
4 - Grounds of objection
New
section 84 provides that the objection must state fully and in detail the
grounds relied on.
New
section 85 includes a table which sets out the type of decisions against which
objections may be lodged, and the person or persons to whom the Registrar must
serve a copy of the grounds of the objection.
New
section 86 provides that the other party may oppose or support the objection,
by lodging with the Registrar a written notice, setting out fully and in detail
the ground relied on. Such written notice must be lodged within 28 days after
service on the person of the grounds of the objection.
Division
5 - Consideration of objections
New
section 87 deals with consideration of objections by the Registrar.
Subsection 87(1) provides that if an objection is lodged with the
Registrar, the Registrar must consider the objection and any notice lodged with
the Registrar under section 86, and within 60 days after the objection is
lodged, either disallow the objection, or allow it in whole or in part. The
process for objections under the Child Support Registration and Collection Act
is varied as the Registrar is no longer deemed to have made a decision to
disallow the objection if the 60 days passes without the decision being made.
Subsection 87(2) provides that the Registrar must serve notice in writing
of the decision on the person who lodged the objection, and each other person
who was entitled to be served a copy of the objection under section 85.
Subsection 89(3) provides that the notice must include, or be accompanied
by, the reasons for the decision and a statement to the effect that if a person
is aggrieved by a decision on the objection, if the decision objected too was a
decision by the Registrar that an application for a departure from the formula
was too complex (that is, a decision under either section 98E or 98R), the
person may apply to a court, or otherwise, apply to the SSAT, for review of the
decision. The provision of reasons for the decision will assist in deciding
whether or not they wish to apply to the SSAT or a court for review of the
decision. Subsection 87(4) provides that a contravention of
subsection 87(3), for example, if the notice does not set out that a
person may apply to the SSAT for review of the decision, does not affect the
validity of the decision.
Part VIIA - SSAT review of certain decisions
Division
1 - Preliminary
Section
87A is a simplified outline of Part VIIA.
New
section 88 sets out that the objective of the SSAT is to provide a mechanism of
review that is fair, just, economical, informal and quick.
Division
2 - Applications for review
Subdivision
A – Applications for review
New
section 89 deals with applications for review. Subsection 89(1) provides
that a person may apply to the SSAT for review of a decision if the decision,
and the person, is set out in the table included in subsection 89(1).
This table includes a decision on an application for an extension of time under
section 83, and a decision under subsection 87(1) on an objection to
a decision. Subsection 92(2) provides that a person may not apply to the
SSAT in relation to decisions by the Registrar that the matter was too complex
for him or her to deal with administratively (that is, decisions under sections
98E or 98R). A note following subsection 89(2) explains that in that
case, the person may apply to court for a departure order.
Subdivision
B - Time limits on applications for review
New
section 90 sets out time limits on applications for review and provides that a
person must apply to the SSAT for review within 28 days after being served with
notice under subsection 83(3) or 87(2).
New
section 91 deals with applications for extension of time.
Subsection 91(1) provides that the period for applying for review has
ended, a person may make an application asking the SSAT Executive Director to
consider the application for review despite the ending of the period.
Subsection 91(2) provides that the extension application must state the
reasons for the person’s failure to apply for the review within the period
required by section 90.
New
section 92 deals with consideration of application for extension of time
for lodging objections. Subsection 92(1) provides that if a person
applies to the SSAT under section 91, the SSAT Executive Director must
consider the extension application, and within 60 days, either grant or refuse
the extension application, and if it is granted, deal with the application for
review. However, the consideration of the application for review does not have
to take place within 60 days of the application for extension of time being
lodged.
Subsection 92(2)
is a deeming provision and provides that if the SSAT Executive Director does
not make a decision within 60 days, he or she is taken to have refused the
extension application.
Subsection 92(3)
provides that the SSAT Executive Director must give written notice of the
decision granting or refusing the extension application to the person who made
that application. Subsection 92(4) provides that if the SSAT Executive
Director refuses the extension application, the notice under
subsection 92(3) must include, or be accompanied by, a statement to the
effect that the person may apply to the AAT for review of the decision, and may
request a statement of reasons under section 28 of the Administrative Appeals Tribunal Act 1975
(the AAT Act), unless he or she has already received a document which
sets out such reasons.
Subsection 95(5)
provides that a contravention of subsection 92(4), for example, if a
notice does not set out that a person may apply to the AAT for review of a
decision, does not affect the validity of the decision.
Subsection 92(6)
provides that if an extension of time application under section 91 is
granted, the person who made the application is taken to have duly made the
application for review under this Part to which the extension application
relates.
Subsection 92(7)
provides that a person whose application decision made been refused by the SSAT
Executive Director may apply to the AAT for review of the decision.
Subsection 92(8) provides that decision in subsection 92(7)
has the same meaning as in the AAT Act.
New
section 93 provides that the procedures on receiving application for
review are not required to be undertaken until the review of the extension
application is completed. That is, subsections 95(2) to (6) and section
96 are taken not to apply in relation to the application for review unless and
until a decision of the SSAT Executive Director, the AAT or a court decides
that the extension application is to be granted by the SSAT Executive
Director. In that case, the notice requirements under subsection 95(2)
apply as if the application for review for SSAT review was made on the day on
which the decision in relation to the extension application was made.
Subdivision
C - Application procedures
New
section 94 deals with application procedures for review by the SSAT.
Subsection 94(1) provides that a person’s options for applying to the SSAT for
review under Part VIIA are broad, and include sending or delivering a written
application to an office of the SSAT, the Department, the Commonwealth Services
Delivery Agency, or the Department administering the Commonwealth Services
Delivery Agency Act 1997. This means that applications can be made to the
Child Support Agency and Centrelink, as well as to other offices.
Paragraphs 94(1)(b) and (c) provides that applications can also be made
orally, either in person or by telephone to the SSAT. Subsection 94(2)
provides that if a person makes an oral application in accordance with
paragraphs 94(1)(b) and (c), then the person receiving the oral
application must make a written record of the details and note on the record
the day on which the oral application was made. Subsection 94(3) provides
that the written record of an oral application has effect under Part VIIA as if
the written record were a written application made on the day on which the oral
application was made. Subsection 94(4) provides that an application may
(but is not required to) include a statement of the reasons for seeking a
review of the decision.
New section 95 deals with procedures on receiving
applications for review.
Subsection 95(1) provides that, where an
application for review is sent to an office of the Department or another
agency, the Secretary or the CEO is responsible for ensuring that it is sent to
the SSAT as soon as practicable but in any case no later than seven days after
the Department or Agency received it.
Subsection 95(2) provides that the SSAT Executive
Director must give the applicant, the Registrar and any other party written
notice that an application has been received. A note following
subsection 95(2) explains that the parties to the review are set out in
section 101.
Subsection 95(3) requires the Registrar to
provide the SSAT with a statement about the decision under review. The
statement must set out the findings of fact, refer to the evidence and give the
reasons for the decision. The Registrar is also required to provide the SSAT
Executive Director with all documents relevant to the decision under review.
These requirements have to be complied with within 28 days of the
Registrar receiving a notice of the application for review. A note following subsection 95(3)
explains that the Registrar must also send copies of the statement and
documents to each party (see section 96).
Subsection 95(4) provides that, where the SSAT
Executive Director asks the Registrar to send the statement and documents
earlier than the date specified in subsection 95(3), the Registrar must take
reasonable steps to comply with this request. The SSAT Executive Director
might, for example, issue a request under this subsection in cases in which
financial hardship would be likely to occur, pending the determination of the
appeal.
Subsection 95(5) provides for the situation where
relevant documents come into the Registrar’s possession after the statement has
been prepared and sent, with the relevant documents, to the SSAT Executive Director.
The Registrar is required to send a copy of the later documents to the SSAT
Executive Director as soon as practicable after receiving them.
Subsection 95(6) provides that if the Registrar
must provide the SSAT with a document under this section, if the SSAT Executive
Director requests a specified number of copies, the Registrar must provide that
number of copies, or otherwise, two copies. This requirement is a new addition
to the SSAT’s procedures, and does not apply in relation to social security and
family assistance matters before the SSAT.
Section 96 provides that parties are to be given
statements about the decisions under review. Subsection 96(1) requires
the Registrar to give, within 28 days after receiving the notice, each party to
the review (other than the Registrar) a copy of the Registrar’s statement of
reasons, and documents relevant to the decision. A note following
subsection 96(1) explains that the parties to the review are set out in
section 101. If the Registrar would prefer not to have to provide a
document or part of document that is relevant to the review to a party, such as
a medical report or details relating to new partners of a party, to the other
party for privacy reasons, the Registrar may apply to the SSAT for a direction
under section 97 within the 28 day timeframe otherwise allowed for the
provision of the documents. The application for a direction must be served on
all the parties. If the SSAT makes the direction that the document or part of
document need not be provided to the party, the Registrar need not provide it
under subsection 96(1).
Subsection 96(2) enables the SSAT Executive
Director to order the person receiving the above copy not to disclose any information
from the statement or any information other than as specified in the order.
Subsection 96(3) provides that a person
commits an offence if the SSAT Executive Director gives a direction to the
person under subsection 96(2) and the person contravenes the direction. A
penalty of imprisonment for two years applies for a failure to comply with the
order.
New section 97 deals with when
a document, or part of a document, is not required to be sent.
Subsection 97(1) provides that subject to section 98, the Registrar
is not required, under paragraph 95(3)(b) or subsection
93(5), to send a document, or part of a document, that is relevant
to a review if:
(a)
for a document
or a part of a document that is required under paragraph 95(3)(b)—within 28
days after receiving the relevant notice under subsection 95(2); or
(b)
for a document
or a part of a document that is required under subsection 95(5)—as soon as
practicable;
the Registrar:
(c)
applies to the
SSAT Executive Director for a direction under section 98 in relation to
the document or the part of the document; and
(d)
sends to the
SSAT two copies of the document or the part of the document, together with the
application for the direction; and
(e)
gives a copy of
the application for the direction to each party to the application for review.
Subsection 97(2) provides
subsection 97(1) does not affect the obligation of the Registrar to comply
with paragraph 95(3)(b) or subsection 93(5) in relation to any document or part
of a document to which subsection 97(1) does not apply.
New section 98 deals with
directions prohibiting or restricting disclosure of documents.
Subsection 98(1) provides that if, after considering an application by the
Registrar under section 97 for a direction in respect of a document or a
part of a document, the SSAT Executive Director directs the Registrar to send
the document or the part of the document under subsection 95(3) or (5), the
Registrar must do so.
Subsection 98(2) provides that
the SSAT Executive Director may give directions (whether on application by the
Registrar under section 97 or on his or her initiative) prohibiting or
restricting the disclosure to some or all of the parties to a review of the
contents of a document or statement referred to in subsection 95(3) or (5) that
relates to the review. The SSAT Executive Director may do this if he or she is
satisfied that it is desirable to do so because of the confidential nature of
the document or statement, or for any other reason.
Subdivision
D – Effect of variations of original decisions on applications
Section
99 deals with variations of decisions before reviews completed.
Subsection 99(1) provides that if the Registrar varies a decision:
(a)
after an application has been
made to the SSAT under this Part for review of the decision; but
(b)
before the determination of the
review;
the
application for review is to be treated as if it were an application for review
of the decision as varied.
Subsection 99(2)
provides that if the Registrar sets a decision aside and substitutes a new
decision:
(a)
after an application has been
made to the SSAT for review of the original decision; but
(b)
before the determination of the
review;
the
application for review is to be treated as if it were an application for review
of the new decision.
Subsection 99(3)
provides that if:
(a)
a person applies to the SSAT for
review of a decision; and
(b)
before the determination of the
review, the Registrar varies the decision or sets it aside and substitutes a
new decision;
the
person may either:
(c)
proceed with the application for
review of the decision as varied or the new decision, as the case may be; or
(d)
apply to the SSAT Executive
Director to have the application dismissed under section 100.
Subdivision
E – Dismissal of applications
Section
99A provides that Subdivision E does not apply in relation to the Registrar.
Section 100
deals with dismissal of applications. Subsection 100(1) sets out the
situations in which the SSAT Executive Director may, on the application of a
party or on his or her own initiative, dismiss an application for review.
These situations are:
(a)
the decision is not reviewable
under this Part; or
(b)
the application is frivolous or
vexatious; or
(c)
all of the parties consent; or
(d)
the SSAT Executive Director is
satisfied:
(i)
after having communicated with
each party; or
(ii)
after having made reasonable
attempts to communicate with each party and having failed to do so;
(iii)
or a combination of both, that
none of the parties intend to proceed with the application; or
(e)
all of the parties fail to attend
the hearing; or
(f)
all of the parties have been
removed from the proceeding under subsection 101(5).
(a)
The requirement
in paragraph 100(1)(c) for all the parties to consent to the dismissal
means that a specific withdrawal provision is not required.
The requirement in
paragraph 100(1)(c) that the SSAT Executive Director can only dismiss the
application, if none of the other paragraphs apply, if all the parties consent,
means that there is no need for a provision which allows the parties to
withdraw their application.
Subsection 100(2) provides that
the SSAT Executive Director may dismiss an application because it is frivolous
and vexatious only if:
(a) one of the
following applies:
(i) the SSAT Executive
Director has received and considered submissions from the applicant;
(ii) the SSAT Executive
Director has otherwise communicated with the applicant in relation to the
grounds of the application;
(iii) the SSAT Executive
Director has made reasonable attempts to communicate with the applicant in
relation to the grounds of the application and has failed to do so; and
(b) all of the
parties (other than the applicant) consent to the dismissal.
The
purpose of subsection 100(2) is to ensure that people are given a right to be
heard, and that a matter is not dismissed without the SSAT considering the
matter before deciding that it is vexatious or frivolous. In addition to
dismissing an application, the SSAT Executive Director also has the power to
remove parties from the review (see section 101).
Division
3 – Parties to reviews
Section
102 sets out the parties to a review by the SSAT. Subsection 101(1)
provides that the parties are the applicant, the Registrar, any other person
who was entitled to apply for review of the decision under section 92 (that is,
a person who applied for an extension of time, a person who objected to an
original decision under section 80, or a person who was entitled to be served a
copy of the grounds under section 85), and any other person who has been made a
party to the review under subsection 101(4).
Subsection 101(2)
provides that the any person whose interests are affected by the decision may
apply in writing to the SSAT Executive Director to be made a party to the
review.
Subsection 101(3)
limits subsection 101(2). Paragraph 101(3)(a) provides that a person
may not apply to be made a party to the review if he or she is a child of the
applicant, of any other person who was entitled to apply for review, or of any
person who made been made a party to the review. However,
paragraph 101(3)(a) does not exclude adult children of a party to a
review. Paragraph 101(3)(b) provides that if a party referred to in paragraph 101(1)(a),
(c) or (d) is an eligible carer, but not a parent the person, they may not
apply. That is, children who
are being cared for by one of the parties to the child support assessment,
despite not being that party's biological child, may not apply to be joined as
parties to the review.
This amendment reflects a position that children
under the age of 18 should generally not become involved in reviews of child
support assessments applying to them, despite the fact they will be a person
whose interests are affected by the decision. This is to protect such young
people from being pressured to support a particular parent's position for child
support purposes, which would be damaging to the child's continuing
relationship with both their parents or carers.
Subsection 101(4)
provides that the SSAT Executive Director may order that a person who has
applied under subsection 101(2) may be made a party to a review.
Subsection 101(5)
gives the SSAT Executive Director the power to remove parties to a review. The
SSAT Executive Director may do this if:
(a)
the party consents; or
(b)
the SSAT Executive Director is
satisfied, having communicated with the party, and having made reasonable
attempts to communicate with the party and having failed to do so, that the party
does not intend to participate in or proceed with the review; or
(c)
the party fails to comply with a
direction or order of the SSAT given in relation to the review; or
(d)
the party fails to attend the
hearing
Section
102 deals with notice of application to persons affected by a decision.
Subsection 102(1) provides that reasonable steps must be taken by the Executive
Director to give written notice of the application to another person whose
interests are, in the Executive Director's opinion, affected by the decision.
Subsection 102(2)
limits subsection 102(1). Paragraph 102(2)(a) provides that a person
may not apply to be made a party to the review if he or she is a child of the
applicant, of any other person who was entitled to apply for review, or of any
person who made been made a party to the review. Paragraph 102(2)(b)
provides that if a party referred to in paragraph 101(1)(a), (c) or (d) is
an eligible carer, but not a parent the person, they may not apply. That is, children who are being cared for by one of
the parties to the child support assessment, despite not being that party's
biological child, may not be given notice of the review. For further
discussion of this issue, see the comments made in relation to section 101
above.
Subsection
102(3) requires the notice under subsection 102(1), which may be given at any
time before the review is determined, to be in writing, and also to set out the
person's right to be joined as a party under section 101. Under subsection
102(4), each party is to be given a copy of the notice.
Division
3A – Prehearing conferences
Section 103
deals with pre-hearing conferences. Subsection 103(1) provides that the
SSAT Executive Director may convene one or more pre-hearing conferences if he
or she considers that it would assist in the conduct and consideration of the
review to do so. This subsection is broadly drafted to allow the SSAT to use
pre-hearing conferences to explore the issues about which the parties are in
dispute, and to narrow the ground between the parties. Subsection 103(2)
provides that at a conference, the SSAT may fix a time for the hearing, and
give directions about the timing of making submissions or bringing evidence. A
note following section 103 provides that section 103W (which deals
with the SSAT’s powers if the parties reach agreement) applies if the parties
reach an agreement during the pre-hearing conference.
Division
4 – Hearings
Subdivision
A – Arrangement for hearings
Section
103A deals with arrangements for hearings. Subsection 103A(1) provides
that the SSAT Executive Director must fix a day, time and place for the hearing
of a review of a decision if:
(a)
an application is made to the
SSAT for review of the decision; and
(b)
the parties to the review do not
reach an agreement before a hearing of the review is to begin; and
(c)
the SSAT Executive Director has
not already done so at a pre‑hearing conference.
Subsection 103A(2)
provides that the SSAT Executive Director must give the applicant and any other
parties to the review written notice of the day, time and place fixed for the
hearing of the application. Subsection 103A(3) provides that the notice
given under subsection 103A(2) must be given a reasonable time before the
day fixed for the hearing. Subsection 103A(3) provides that the notice
under subsection 103(2) must be given a reasonable time before the day
fixed for the hearing.
Subdivision
B – Submissions from parties other than the Registrar
Section
103B provides that Subdivision B does not apply in relation to the Registrar
(Subdivision C deals with submissions by the Registrar).
Section
103C deals with submissions from the parties. Subsection 103C(1) provides
that a party to a review may make oral, written, or both oral and written
submissions. A note following subsection 103C(1) explains that the SSAT
Executive Director may direct that a hearing be conducted without oral
submissions from the parties (see section 103D). Subsection 103C(2)
provides that another person may make submissions on a party’s behalf.
Subsection 103C(3) provides that the SSAT Executive Director may determine
the means by which submissions are to be made, for example, electronically or
by telephone. Subsection 103C(4) provides that the SSAT Executive
Director may make a determination under subsection 103C(3) in relation to
an application if:
(a)
the application is urgent;
(b)
the party lives in a remote area
and travelling to the hearing would incur unreasonable expenses;
(c)
the party is unable to attend the
hearing because of illness or infirmity;
(d)
the party has failed to attend
the hearing and has not indicated that he or she intends to attend the hearing.
However,
these specific situations do not limit the SSAT Executive Director’s power to
make a determination under section 103C.
Subsection 103C(5)
provides that if a party is not proficient in English, the SSAT Executive
Director may give directions as to the use of an interpreter.
Section
103D provides, in subsection 103D(1), that the SSAT Executive Director may
direct that a hearing be conducted without oral submissions from the parties if
the SSAT Executive Director considers that the review hearing could be
determined fairly on the basis of written submissions by the parties and all
parties to the review consent to the hearing being conducted without oral
submissions.
Subsection 103D(2)
provides that if the SSAT Executive Director directs that the hearing is to be
conducted on written submissions only, he or she must give the parties a
written notice informing them of the direction, inviting them to make written
submissions, and informing them to where, and by when, submissions must be
made. The SSAT Executive Director must also give a copy of the notice to the
Registrar.
Subsection 103D(3)
provides that the notice must give a reasonable time for written submissions to
be made.
Subsection 103D(4)
provides that despite any direction under subsection 103D(1), the SSAT may
order, if it thinks it necessary after considering the written submissions made
by the parties, make an order permitting the parties to make oral submissions
to the SSAT at the hearing of the review.
Section 103E deals with hearings without oral
submissions from the parties. Subsection 103E(1) provides that if a party
has informed the SSAT Executive Director that he or she does not intend to make
oral submissions, the SSAT may proceed to hear the application without oral
submissions from the party.
Subsection 103E(2) provides that if the SSAT
Executive Director has determined that oral submissions are to be made by
telephone or other electronic means, and on the day of the hearing, the
presiding member has been unable to contact the party or his or her
representative, the SSAT Executive Director may authorise the SSAT to proceed
without oral submissions from the party.
Subsection 103E(3) provides that the SSAT
Executive Director may authorise the SSAT to proceed without oral submissions
from a party where there has been no determination that submissions from that
party may be made by telephone or other electronic communications equipment and
the party does not attend the hearing.
Subsection 103E(4) provides that the SSAT
may proceed to hear the application where the SSAT Executive Director has given
an authorisation under either subsection 103E(2) or (3). If the hearing
for the review has not been completed, subsection 103E(5) allows the SSAT
Executive Director to revoke an earlier authorisation made under subsection
103E(2) or (3). This may arise, for example, where contact is made with a
party after the authorisation was made.
Subdivision
C – Submissions from the Registrar
Section
103F deals with submissions from the Registrar. The ways in which the
Registrar may make submissions are limited because review by the SSAT is,
amongst other things, required to be informal, should, subject to the
legislation, focus on the views of the people who are parties to the child
support matter. The Registrar’s methods of giving evidence are also limited to
address any perceptions of imbalance in the resources available to the
Registrar to argue their position, compared to that of the parents. The SSAT’s
role in child support matters is also different to its role in social security
and family assistance matters, because in child support matters, the dispute
invariably involves two private parties as well as the Registrar. In social
security and family assistance matters, the dispute is generally between a
person and the Secretary. The ways in which the Registrar may make submissions
is also limited because the Registrar is a party to the proceedings before the
SSAT, and thus he or she cannot intervene under section 103F.
Subsection 103F(1)
provides that the Registrar may make written submissions to the SSAT.
Subsection 103F(2) provides that the Registrar may request in writing the
SSAT’s permission to make oral, or both written and oral, submissions. The
request must explain how such submissions would assist the SSAT. Subsection 103F(3)
provides that the SSAT Executive Director may, by writing, grant the request,
if in his or her opinion, having regard to the SSAT’s objective of providing
review that is fair, just, economical, informal and quick, such submissions would
assist the SSAT. Subsection 103F(4) provides that the SSAT Executive
Director may order the Registrar to make oral submissions to the SSAT, or both
oral and written submissions to the SSAT, if, in the opinion of the SSAT
Executive Director having regard to the objective laid down by section 88,
such submissions would assist the SSAT.
Subdivision
D – Other evidence provisions
Section
103G provides that the SSAT may take evidence on oath or affirmation for the
purposes of a review of a decision.
Section 103H provides that children of
parties are not to give evidence. Essentially, a child may not give evidence
if one of the child’s parents, or (if applicable) the child’s non-parent carer,
is a party to the review. This provision reflects a position that children
should generally not become involved in reviews of child support assessments
applying to them, despite the fact they will be a person whose interests are
affected by the decision. This is to protect children from being pressured to
support a particular parent's or carer's position for child support purposes,
which would be damaging to the child's continuing relationship with both their
parents and/or their carers.
Section 103J gives the SSAT Executive Director
broad powers to ask the Registrar to provide any further information or a
document that is in the Registrar’s possession that is relevant to the review.
Subsection 103J provides that the Registrar must comply as soon as practicable,
and in any event within 14 days. If the request is for a document, the
Registrar must provide the SSAT with the number of copies requested, or
otherwise, two copies of the document.
Section
103K deals with the SSAT’s power to obtain information.
Subsection 103K(1) provides that the SSAT may, if it is reasonably
necessary for the purposes of the review, by written notice, require a person:
·
to give information to the SSAT;
·
attend before the SSAT; or
·
produce any documents in his or
her custody or control to the SSAT.
Such
notices must give a reasonable time, of at least seven days, to comply, and if
necessary, give a reasonable manner of providing information, or a reasonable
place for attending or providing documents.
Subsection
103K(2) creates an offence of failing to comply with a notice given by the SSAT
Executive Director. The penalty is imprisonment for six months.
Subsection 103K(3) provides that the offence in subsection 103L(2) is
not made out if complying with the notice might tend to incriminate the
person. A note following subsection 103K(3) states that a defendant bears
an evidential burden in relation to the matters in subsection 103K(3).
See further discussion under section 110X below about this reversal of the
onus of proof.
Subsection 103K(4)
provides that a person who is required to attend under section 103K is
allowed such expenses as are prescribed in the regulations for the purposes of
subsection 120(2). This covers such things as transport costs, and
accommodation costs if the person is required to be away from home for one or
more nights.
Section
103L provides that the SSAT may require the Registrar to obtain information.
Subsection 103L(1) provides that if the SSAT Executive Director is
satisfied that a person has information that is relevant to a review, or has
custody or control of a document that is relevant to a review, the SSAT
Executive Director may ask the Registrar to exercise the Registrar’s powers
under section 161 of the Child Support Assessment Act or section 120
of the Child Support Registration and Collection Act. In accordance with
section 103T, the SSAT itself cannot exercise the Registrar’s powers under
those sections. A note following subsection 103L(1) explains that a
person who fails to comply with a notice given under section 160161
of the Assessment Act or section 120 of this Act commits an offence under that
section. Subsection 103L(2) provides that the Registrar must comply with
a request under subsection 103L(1) as soon as possible, and in any event,
within seven days of the request being made.
Subdivision
E - Hearing procedure
Section
103M sets out how the SSAT will determine which member is to preside at the
hearing of the review.
Section
103N provides that the SSAT in reviewing a decision under this Part is not
bound by the legal technicalities, legal forms or rules of evidence. Instead,
the SSAT is to act as speedily as a proper consideration of the review allows,
and is to have regard to the SSAT’s objective of providing review that is fair,
just, economical, informal and quick. The SSAT may inform itself on any matter
relevant to a review that it considers appropriate. A note following
section 103N explains that the SSAT Executive Director may give directions
as to the procedure to be followed in connection with reviews (see
section 103ZA).
Given
the sensitive nature of child support proceedings, it is important that private
information is treated confidentially and not disclosed. The following
sections, 103P and 103Q, provide mechanisms to protect parties’ information.
Section
103P provides that the hearing of a review must be in private. The SSAT
Executive Director may give directions as to the persons who may be present at
any hearing, having regard to the wishes of the party, and the need to protect
their privacy.
Section
103Q allows the SSAT Executive Director to impose restrictions on the
disclosure of information obtaining during a hearing of a child support
matter. The SSAT Executive Director may make an order directing a person
present not to disclose any information obtained during the hearing, or not to
disclose any information obtained except for the purposes of the hearing, and
in the circumstances specified in the order. A contravention of such an order
is an offence, and is punishable by imprisonment for two years.
Section
103R allows the SSAT to adjourn hearings. However, the SSAT may refuse to
adjourn proceedings if the hearing has already been adjourned on two or more
occasions, or if the SSAT is satisfied that to grant an adjournment would be
inconsistent with the SSAT’s objective of providing review that is fair, just,
economical, informal and quick.
Division 5 - Decisions on review
Subdivision
A - SSAT review powers
Section
103S provides that the SSAT must affirm, vary or set aside decisions. The SSAT
may also substitute a new decision or send the matter back to the Registrar for
reconsideration in accordance with any directions or recommendations of the
SSAT. However, the SSAT cannot make a decision that the Registrar himself or
herself was not able to make (see section 103T below).
Section
103T sets out the powers of the SSAT for the purpose of reviews. It provides
that the SSAT may, for the purpose of reviewing a decision under this Part,
exercise all the powers and discretions that are conferred by the Child Support
Assessment Act and the Child Support Registration and Collection Act on the
Registrar, except if the exercise of those powers by the SSAT is limited by
regulation. If the Registrar’s power is limited in some way, then the SSAT’s
power is similarly limited. For example, the SSAT may not make a determination
that the formula is departed from such that an amount less than the minimum
child support assessment is payable, in circumstances in which the Registrar
could not make such a decision. Subsection 103T(3) provides that the
regulations may specify provisions of the Child Support Registration and
Collection Act and the Child Support Assessment Act to which
subsection 103T(1) does not apply. This restriction is included because
it is not appropriate for the SSAT to exercise certain of the Registrar’s
powers, such as the Registrar’s power of delegation, and the form of
application for administrative assessment of child support.
Section
103U provides that a review by the SSAT is to be decided according to the
opinion of the majority, except if the opinions of the members are equally
divided. In that case, the question is to be decided according to the opinion
of the member presiding.
Section
103V sets out the date of effect of SSAT decisions. It applies if the SSAT
varies a decision, or sets aside a decision and substitutes a new decision.
Subsection 103V(2) provides that the decision as varied, or the new decision,
has effect, or if taken to have had effect on a day specified in the SSAT’s
decision, or the day on which the decision under review has or had effect.
Subdivision
B – Consent orders
Section 103W
sets out the powers of the SSAT if the parties reach agreement, including at a
pre-hearing conference under section 103. Paragraph 103W(1)(a) deals
with the situation where, if at any stage of the review proceedings, the
parties, apart from the Registrar, agree to the terms of a decision of the SSAT
that would be acceptable to the parties. Paragraph 103W(1)(b) provides
that if the terms of the agreement must be put in writing, signed by or on
behalf of the parties and lodged with the SSAT, and, in accordance with
paragraph 103W(1)(c), the SSAT is satisfied that the decision would be
within the SSAT powers, then the SSAT must act in accordance with either
subsection 103W(2) or (3). A note following subsection 103W(1)
explains that that the SSAT cannot make a decision that the Registrar could not
have made (see section 103T).
Subsection 103W(2)
provides that if an agreement is an agreement as to the terms of a decision of
the SSAT in the proceeding, the SSAT may make a decision in accordance with
those terms without holding or completing a hearing. Subsection 103W(3)
provides that if the agreement relates to a part of the proceeding, or a matter
arising out of the proceeding, the SSAT may give effect to the agreement’s
terms without dealing at the hearing with that matter.
Subdivision
C – Notification and publication of decisions
Section 103X
deals with the procedure following a decision by the SSAT.
Subsection 103X(1) provides that within 14 days after making the decision,
the SSAT must give the parties a written notice setting out the decision, and
the fact that an appeal may be made to a court on a question of law. The SSAT
must also return any documents to the Registrar which the Registrar provided,
and give to the Registrar a copy of any document on which the findings on any
material of fact are based. However, subsection 103X(2) provides that a
failure to comply with subparagraph 103X(1)(a)(ii), that is, a failure to
inform a party that he or she may apply to a court on a question of law, does
not affect the validity of the decision.
Subsection 103X(3)
provides that within 14 days after making the decision, the SSAT must either
give reasons for the decision orally, and explain that the parties may request
written reasons under paragraph 103X(3)(b) within 14 days after the
notice is given under paragraph 103Y(1)(a), or provide written reasons.
Paragraph 103X(3)(b) provides that written reasons must set out the
reasons for the decision, the findings on any material questions of fact and
refer to the material or evidence on which the findings of fact are based.
Subsection 103X(4)
provides that if the SSAT gives its reasons orally, within 14 days after those
oral reasons were given, the party may request a written notice.
Subsection 103X(5) provides that the SSAT must comply with a request under
subsection 103X(4) within 14 days.
Section
103Y deals with correction of errors in decisions or statement of reasons.
Subsection 103Y(1) provides that if the presiding member of the SSAT as
constituted for the purposes of the review is satisfied that there is an
obvious error in the text of the decision, or the written statement of reasons,
the presiding member alter the text of the decision or statement.
Subsection 103Y(2) provides that the altered text is taken to be the
SSAT’s decision or the reasons for the decision. Subsection 103Y(3) gives
examples of obvious errors, including clerical or typographical errors, or
inconsistencies between the decision and the statement.
Subdivision C – Costs
Section
103Z deals with the costs of review. It provides that in general, a party to a
review must bear his or her own costs. However, the SSAT may determine that
the Commonwealth is to pay any reasonable travel or accommodation costs
specified in the determination. Also, if the SSAT arranges for the provision
of a medical service in relation to a party to the review, the SSAT may
determine that the Commonwealth is to pay the costs of the provision of the
evidence. Subsection 103Z(4) provides that if the SSAT makes a
determination under subsection 103Z(2) or (3), the costs are payable by
the Commonwealth.
Division
6 – Other provisions
Section 103ZA deals with
directions as to procedures for reviews. Subsection 103ZA(1) provides
that the SSAT Executive Director may give both general directions as to the
procedure to be followed by the SSAT, and directions in relation to a
particular review. Such directions must not be inconsistent with the Child
Support Assessment Act or the Child Support Registration and Collection Act
(see subsection 103ZA(2)), and may be given before or after the hearing of
a particular review has commenced (see subsection 103ZA(3)). The
presiding member of the SSAT as constituted for a particular review may also
give directions for that review (see subsection 103ZA(4)). As with
directions given by the SSAT Executive Director, such directions must not be
inconsistent with the Child Support Assessment Act or the Child Support
Registration and Collection Act, but in addition must not be inconsistent with
any directions given under subsection 103ZA(1) (see
subsection 103ZA(5)). Directions may be given before or after the hearing
of a particular review has commenced (see subsection 103ZA(6)).
Directions given under section 103ZA must be consistent with the SSAT’s
objective of providing review that is fair, just, economical, informal and
quick (see subsection 103ZA(7)). A general direction made under
paragraph 103ZA(1)(a) is a legislative instrument under the Legislative Instruments Act 2003
(see subsection 103ZA(8)). A direction made under
paragraph 103ZA(1)(b) or subsection 103ZA(4) is not a legislative
instrument (see subsection 103ZA(9)). This provision is included to
assist readers, as the instrument is not a legislative instrument within the
meaning of section 5 of the Legislative Instruments Act 2003.
Item
70 repeals and substitutes the
heading of Part VIII:
Part
VIII – Court review of certain decisions
Item
71 inserts before section 104
various new sections dealing with court review of certain decisions.
Division
1 – Preliminary
Section
103ZB sets out a simplified outline of Part VIII.
Division
2 – Jurisdiction of courts
Section
103ZC sets out a simplified outline of Division 2 of Part VIII.
Item
72 adds at the end of Part VIII a
new Division 3:
Division
3 – Appeals and references of questions of law from SSAT to courts
Subdivision
A – Preliminary
Section
110A sets out a simplified outline of Division 3 of Part VIII.
Subdivision
B – Appeals from the SSAT
Section
110B deals with appeals from decisions of the SSAT. It provides that a party
to a proceeding before the SSAT may appeal to a court having jurisdiction, on a
question of law, from any decision of the SSAT in that proceeding. This is
consistent with how matters are currently appealed from the AAT to a court.
The SSAT and AAT are tribunals which consider the merits of a case, whereas a
court usually only considers matters which raise a question of law.
Section
110C deals with time limits for instituting appeals. Subsection 110C(1)
provides that an appeal to a court must be instituted within the time
prescribed by the applicable Rules of Court, or within such further time as is
allowed under the applicable Rules of Court, and in such manner as prescribed
by the applicable Rules of Court. Subsection 110C(2), without limiting
subparagraph 110C(1)(a)(ii), provides that further time may be allowed if
the SSAT initially gave its decision orally, and later gave a written statement
of reasons, and the written statement contains reasons that were not mentioned
in the oral statement.
Section
110D provides that the parties to the appeal are the people who were the
parties to the proceedings before the SSAT when the SSAT made the relevant
decision. This section is expressed in this way to provide clarity in who are
the parties to the appeal, because parties may have been joined to, or
dismissed from, the SSAT proceedings, at various points.
Section
110E provides that the jurisdiction of a court to hear and determine appeals
from SSAT proceedings may be exercised by the court constituted as a Full Court
or by a single Judge.
Section
110F deals with the powers of courts. Subsection 110F provides that the
court must hear and determine an appeal and may make such orders as it thinks
appropriate. Subsection 110F(2), without limiting subsection 110F(1), provides
that the orders a court may make include affirming or setting aside the SSAT’s
decision, remitting the case to the SSAT to be heard and decided again, either
with or without further evidence, in accordance with the court’s directions. Paragraph 110F(3)(a)
provides that if a matter is remitted to the SSAT, the SSAT does not need to be
constituted by the same person or persons who originally made the decision.
Paragraph 110F(3)(b) provides that whether or not the SSAT is reconstituted
for the hearing, the SSAT may have regard to any record of proceedings before
the SSAT prior to the appeal, so long as doing so is not inconsistent with the
court’s directions.
Section
110G provides that the courts may make findings of fact. Paragraph 110G(1)(a)
provides that the court may make findings of fact that are not inconsistent
with the findings of fact made by the SSAT (other than findings made by the
SSAT as the result of an error of law). Paragraph 110G(1)(b) sets out
various matters to which the court must have regard if the court chooses to
exercise its discretion to make findings of fact. Subsection 110G(2)
provides that the court may have regard to the evidence given in the proceeding
before the SSAT and receive further evidence. Subsection 110G(3) provides
that this does not limit the court’s power under paragraph 110F(2)(b) to
make an order remitting the case to be heard and decided again by the SSAT.
Subdivision
C – References of questions of law from SSAT
Section
110H deals with references of questions of law from the SSAT.
Subsection 110H(1) provides that the SSAT may, on its own initiative, or
at the request of a party, refer a question of law arising in a proceeding
before it to a court for decision. Subsection 110H(2) provides that a
question must not be referred without the SSAT Executive Director’s agreement.
Subsection 110H(3) provides that if a question has been referred to a
court, the SSAT must not give a decision to which the question is relevant
while the reference is pending, or proceed in a manner, or make a decision
inconsistent with, the opinion of the court on the matter.
Section
110J provides that the jurisdiction of a court to hear and determine a question
of law must be exercised by the court constituted as a Full Court or by a
single Judge.
Subdivision
D – Other provisions
Section
110K deals with the sending of documents to, and disclosure of documents by,
the court. It provides that when an appeal is instituted in a court, or a
question of law is referred to a court, the SSAT Executive Director must send
to the court all the documents that were before the SSAT in relation to the
proceeding to which the appeal or reference relates. At the conclusion of the
proceeding, the court must return the documents to the SSAT.
Item
73 inserts after Part VIII a new
Part VIIIA.
Part
VIIIA – Other provisions relating to reviews of decisions
Division
1A – Preliminary
Section 110N
sets out a simplified outline of Part VIIIA.
Division
1 – Effect of pending reconsiderations on assessments, registrations etc.
Subdivision
A – Preliminary
Section
110P provides that Division 1 applies for the purposes of the Child Support
Assessment Act and the Child Support Registration and Collection Act and that
Division 4 is subject to section 111C (stay orders).
Section
110Q sets out a number of matters which are a reconsideration, for the purposes
of the Child Support Registration and Collection Act. These matters are:
(a)
an objection to a decision under
Part VII;
(b)
an application to the SSAT for
review of that decision under Part VIIA;
(c)
an appeal to a court from that
review under Division 3 of Part VIII;
(d)
an appeal to another court from
that appeal under Division 2 of Part VIII and any subsequent appeals under
that Division.
Subdivision B – Effect of pending
reconsiderations
Section
110R provides that the institution of a reconsideration does not affect the
operation of the decision, or the taking of action to implement the decision.
For example, the SSAT may make a decision favourable to one party, which
requires the Registrar to alter the Child Support Register. The fact that
another party has appealed the matter to a court does not affect the
Registrar’s obligation to amend the Child Support Register. Section 110R has a
very broad application, and is intended to ensure the continued operation of
the child support system, despite any reconsiderations which may be pending.
Section
110S provides that the fact that reconsideration of registrable maintenance is
pending does not interfere with, or affect, the registration of the liability,
or the particulars entered in the Child Support Register in relation to the
liability. Subsection 110S(2) provides that any amounts payable under
such a liability, or payable by way of a penalty may be recovered as if no
reconsideration were pending. Because it deals only with reconsideration of
registrable maintenance liabilities, section 110S is narrower in its operation
that section 110R.
Section
110T provides, in subsection 110T(1), that the fact that reconsideration
of a decision is pending in relation to a person does not, in the meantime,
interfere with, or affect, any administrative assessment made in relation to a
person. Subsection 110T(2) provides that any such assessment may be
registered under the Child Support Assessment Act and any amounts may be
recovered in relation to the assessment as if no reconsideration were pending.
Because it deals only with reconsideration of a decision in relation to a
person, for example, whether or not a person is a resident of Australia,
section 110T is narrower in its operation than section 110R.
Section 110U provides that the fact that a
reconsideration of a decision of the Registrar under section 64A of the
Child Support Assessment Act does not, in the meantime, interfere with, or
affect the decision. Subsection 110U(2) provides that amounts payable in
relation to a decision may be recovered as if no appeal were pending. Because
it deals only with reconsideration of a decision in relation to a penalty for
underestimating taxable income and a supplementary amount, section 110X is
narrower in its operation than section 110R.
Division
2 – Implementation of decisions
Section
110V provides that when the Registrar, the SSAT or a court makes a decision on
a reconsideration, the Registrar must immediately take such action as is
necessary to give effect to the decision.
Division
3 – Determining when decisions become final
Section
110W sets out how to determine when a decision becomes final.
Subsection 110W(1)
provides that the SSAT’s decision becomes final if an appeal could be made to a
court (that is, an appeal could be made in relation to a question of law), but
an appeal is not made within the period for doing so. The SSAT’s decision
becomes final at the end of the period for making an application to the court.
Subsection 110W(2)
provides that the Full Court of the Family Court’s decision becomes final if an
application for special leave to appeal to the High Court may be made within
the period of 30 days after the making of the decision, but an application is
not made within that period. The Full Court’s decision becomes final at the
end of the period for making a special leave application.
Subsection 110W(3)
provides that the decision of any other court becomes final if an application
for leave to appeal may be made, but application is not made within the period
for doing so. The court’s decision becomes final at the end of the period for
making the application for leave to appeal.
Division
4 – Restrictions on publication of review proceedings
Section 110X
imposes restrictions on the publication of review proceedings.
Subsection 110X(1) provides that a person commits an offence if a person
publishes or disseminates an account of proceedings before the SSAT in relation
to child support, and that account identifies a party to, or a person related
to a party to, the proceedings, or a witness in the proceedings. This is
punishable by imprisonment for 12 months. Subsection 110X(2) sets out
what accounts are taken to identify a person. Subsection 110X(3) creates
an offence of publishing identifying lists. It provides that a person commits
an offence if he or she publishes or disseminates a list of proceedings before
the SSAT in relation to child support. Subsection 110X(4) creates
defences to the offences set out in subsections 110X(1) and (3). The
defences are that the offences do not apply in relation to communications for:
(a)
court proceedings; or
(b)
disciplinary proceedings against
a member of the legal profession; or
(c)
the granting of legal aid; or
(d)
publishing a notice or report in
accordance with a court direction; or
(e)
publication by the SSAT of lists
of proceedings that are to be dealt with by the SSAT;
(f)
publication for use by members of
any profession for professional purposes, such as law reports; or
(g)
publication or dissemination of
an account for the purposes of professional training, informing a person who is
a party to the proceedings, the studies of a person who is a student; or
(h)
publication of accounts of
proceedings, where those accounts have been approved by the court.
The defence elements discussed above in relation to sections 103K
and 110X constitute a reversal of proof, which give to the defendant the onus
of raising the particular matters in the defence, to resist the charge. In
this case, the defendant has an evidential burden of proof so that the
defendant bears the onus of pointing to, or adducing, something to raise the
defence and the prosecution would bear the burden of disproving the defence
beyond a reasonable doubt. This is justified because the matter would fall
peculiarly within the knowledge of the defendant and it would be significantly
more difficult and costly for the prosecution to prove than for the defendant
to establish.
Subsection 110X(5)
provides that offences against subsections 110X(1) or (3) are indictable
offences, and subsection 110X(6) provides that they must not be commenced
without the Director of Public Prosecution’s written consent.
Subsection 110X(7) sets out the definitions of a number of terms used in
section 110X.
Item 74 repeals and substitutes subsection 116(1), and
inserts new subsections 116(1), (1A) and (1B). The changes to
subsection 116(1), and new subsections 116(1A) and (1B) ensure that
the references to various proceedings correctly reflect the changes to where
those proceedings will be located in the child support legislation. In
addition, new subsection 116(1) is different to the current
subsection 116(1) by providing that a document signed by the Registrar
purporting to be a copy of an entry in the Registrar is prima facie evidence,
rather than conclusive evidence of the matters set out in
subsection 116(1). This change makes subsection 116(1) consistent
with provisions in other Commonwealth legislation dealing with similar
matters. .
Family Law Act
Item 75
amends the Family Law Act by inserting at the end of subsection 69B(2) the
words ‘or the Child Support (Registration and Collection) Act 1988’.
This change ensures that subsection 69(1) of the Family Law Act,
which provides that proceedings under Part VII of that Act must only be
initiated in accordance with that Part, does not apply in relation to child
support proceedings. This change is required because proceedings may now be
initiated under the Child Support Registration and Collection Act, whereas
under the current form of the child support law, they may only be initiated
under the Child Support Assessment Act.
Social
Security Administration Act
Item 76
amends the Social Security Administration Act. It omits, in clause 20 of
Schedule 3, the words ‘or the Employment Services Act 1994’ and
substitutes ‘, the Employment Services Act 1994, the Child Support
(Assessment) Act 1989, or the Child Support (Registration and Collection
Act 1988)’. This change means that the SSAT Executive Director may, in
writing, delegate to a member of the SSAT all or any of his or her powers and
functions.
Part
2 – Application
Item
77 sets out the application
provisions for review of decisions.
Decisions
of the Registrar – internal review pending or not yet started at commencement
Subitem
77(1) provides that, subject to subitem
77(3), internal review under Part VII of the Child Support Registration and
Collection Act applies to decisions of the Registrar made under the Child
Support Registration and Collection Act, or the Child Support Assessment Act
before or after the commencement of this item. A note following subitem 77(1)
explains that Part VII of the Child Support Registration and Collection
Act (as amended by this Schedule) also applies if a proceeding for internal
review was pending under that Part or Part 6B of the Child Support
Assessment Act immediately before the commencement of this item (see subitem 77(4)).
Subitem
77(2) provides that review by the
SSAT applies to a decision made by the Registrar under subsection 85(1) or
89(1) of the Child Support Registration and Collection Act after the
commencement of this item, that is, after 1 January 2007.
Decisions of the Registrar – internal review
completed before commencement
Subitem 77(3) deals with situations where a person objected, under Part 6 of the
Child Support Assessment Act or Part VII of the Child Support Registration and
Collection Act, to a decision of the Registrar (the original decision), and
that objection was made, and the Registrar made a decision on that objection
(the objection decision) before the commencement of this Part (that is, before
1 January 2007). An original decision could include, for example, a
decision relating to the particulars of an assessment or the particulars of an
entry in the Child Support Register. In those situations, the Child Support
Assessment Act and the Child Support Registration and Collection Act apply in
the form they took before the commencement of this Schedule. This applies both
in relation to the original decision and the objection decision. In other
words, the person has the right to appeal to the AAT, and directly to the
courts, as they do presently. A proceeding in a court under Division 3 of
Part 7 of the Child Support Assessment Act may be commenced after the
commencement of this item if the Registrar made a decision on an objection to
the relevant particulars of the relevant administrative assessment before the
commencement of this item.
Pending
proceedings – internal reviews
Subitem
77(4) provides that a proceeding
before the Registrar that was, before 1 January 2007, pending under Part 6B of
the Child Support Assessment Act, or Part VII of the Child Support Registration
and Collection Act, is taken, on 1 January 2007, to be pending under Part VII
of the Child Support Registration and Collection Act.
Subitem 77(5) provides that the Child Support Assessment Act and
the Child Support Registration and Collection Act, as in force before the
commencement of this item, continue to apply in relation to a decision made by
the Registrar under:
(a)
subsection 98ZE(1) of the Child
Support Assessment Act (that is, consideration of applications for extensions
of time for lodging objections); or
(b)
subsection 88(1) or 100(1) of the
Child Support Registration and Collection Act (that is, consideration of
applications for extension of time).
The
joint effect of subitems 77(4) and (5) is shown by the following
example:
If the Registrar makes a decision under subsection
98ZE(1) of the Child Support Assessment Act before the commencement of this
Schedule, the AAT can still review the decision (the result of
subitem (5)), but if the AAT grants the extension, it will be an extension
to bring an application under new Part VII of the Child Support
Registration and Collection Act (the result of subitem (4)).
Pending proceedings – court and AAT reviews
Subitem 77(6) provides that the amendments of the Child Support Assessment Act and
the Child Support Registration and Collection Act made by this Schedule do not
affect any proceeding before, or appeal made to, a court or the AAT, or any
order or declaration made by a court or the AAT in force immediately before the
commencement of this item.
Subitem
77(7) provides that the amendments
made to the Child Support Assessment Act by items 5, 9 and 10 do not
apply in relation to a proceeding under Division 3 of Part 7 of the Child
Support Assessment Act as in force immediately before the commencement of this
item. Items 5, 9 and 10 replace references to the objections procedure
and AAT review of certain decisions (item 5), and appeals to the court
against incorrect assessments (items 9 and 10 ) with references to Part
VIIA or Subdivision B of Part VIII of the Child Support Registration and
Collection Act. It ensures that proceedings covered by subitem 77(6)
can continue unaffected by the amendments in this Schedule. A proceeding under
Division 3 of Part 7 of the Child Support Assessment Act
may be commenced after the commencement of this item if the Registrar made a
decision on an objection to the relevant particulars of the relevant
administrative assessment before the commencement of this item (see subitem 77(3))
Item
78 sets out application and savings
provisions in relation to notices. Subitems 78(1) and (2) provide
that the amendments made by various items, which amend the Registrar’s
requirement to give notices, under both the Child Support Assessment Act,
and the Child Support Registration and Collection Act, apply in relation to
notices given after the commencement of this item. Subitem 78(3)
provides that the amendments of the Child Support Assessment Act and the Child
Support Registration and Collection Act do not affect the validity of a notice
given by the Registrar under any provision of those Acts before the
commencement of this item. Even though notices given before commencement will
incorrectly refer to a right to apply to a court or the AAT for review, this
will be dealt with administratively.
Item
79 sets out the application of
section 110X of the Child Support Registration and Collection Act. It
provides that section 110X, which imposes restrictions on the publication of
review proceedings, and creates offences of publishing identifying accounts and
publishing identifying lists, applies in relation to proceedings commenced
under Part VIIA (review by the SSAT), or Division 3 of Part VIII (court review
of certain decisions of the SSAT), of the Child Support Registration and Collection
Act after the commencement of this item.
Item
80 makes specific provision for how
these amendments are to apply in Western Australia in relation to exnuptial
children. Under the Constitution, the Commonwealth child support legislation
applies in the states in relation to exnuptial children only if the states
either refer to the Commonwealth their power to make such laws, or adopt the
relevant Commonwealth laws. All states have referred their power except
Western Australia, which has chosen instead to adopt the child support
legislation from time to time through a series of Acts.
Therefore,
these amendments will apply in relation to exnuptial children in Western
Australia only when the amendments have been adopted. Therefore, the
application provisions discussed above are modified so that they generally
apply in these cases to objection decisions made after the date of adoption,
with matters in train at the date of adoption being treated in the same way as
matters in train at 1 January 2007 for all other cases, as discussed above.
Item
80 does this by providing that the
application arrangements in items 77 to 79 apply in relation to
exnuptial children in Western Australia as if references in those items to the
commencement of the items were references to the adoption of the amendments.
Until
the adoption, parents of exnuptial children in Western Australia will continue to have the
current access to court review of objection decisions.
Schedule 4 – Other amendments commencing 1 January
2007
Summary
This
Schedule provides for the other reforms that will commence on
1 January 2007. In particular, the relationship between the courts
and the new Child Support Scheme will be simplified, particularly in relation
to parentage. Parents will have better access to court enforcement of child
support debts and courts will have increased powers to seek information and
evidence in those cases and to make interim arrangements for their child
support cases generally. A further measure addresses the fact that, currently,
the Child Support Registrar can backdate changes of assessment for an almost
unlimited period of time. This will be amended so that the Registrar can only
backdate changes of assessment for 18 months, or a court for up to seven years.
Background
BACKDATING OF CHANGES OF ASSESSMENT TO BE LIMITED TO
18 MONTHS EXCEPT IN CERTAIN CIRCUMSTANCES
Currently, an application for a change of assessment
may be made for an almost unlimited period of time. Section 98B of the Child
Support Assessment Act provides that ‘at any time when an administrative
assessment is in place in relation to a child’, the liable parent or carer may
make an application for a departure from that assessment.
Subsection 98K(1) provides that if at any time when an administrative
assessment is in force in relation to a child, the Registrar is of the view
that special circumstances exist, the Registrar may make a determination that
the administrative assessment should be departed from. That is, an application
for a change of assessment may open past periods of child support to review. In
some circumstances, if a parent wishes to avoid paying a large outstanding
child support debt, he or she may apply for a change of assessment for a past
period, thus making it difficult for the Child Support Agency to enforce that
debt. This would occur if a Senior Case Officer determined it was just and
equitable and otherwise proper to backdate a reduction to the assessment. A
change of assessment can also be used retrospectively to create debt.
The changes in this Schedule limit the time period
for which a change of assessment can be backdated to 18 months before the
liable parent or carer lodged the application, or the Registrar notified the
parties of his or her intention to make a determination. The exception to this
rule is where the parent or liable carer, or the Registrar applies to the court
for leave for the change of assessment to be backdated for a period of up to
seven years. The court can grant leave for the Registrar to backdate the
matter for a period of longer than 18 months. In this case, the court may
order that the matter can be backdated for a specific period, such as three
years, or allow the Registrar to determine the period, not longer than seven
years, for which the change of assessment will be backdated. Alternatively, the
court can grant leave to itself to make an order in relation to the matter.
In making its decision, either in granting leave to
the Registrar, or making an order itself, the court must consider a series of
factors. These factors include the responsibility and reason for the delay in
making the application, and any hardship which may result if leave is not
granted, as well as any other relevant factors.
PARENTAGE DECLARATION WHERE THE PAYER IS NOT
A PARENT OF THE CHILD
These
measures are to address the perception that it is difficult for a person who
has paid child support and later discovers that they are not the parent of the
child to recover the child support they have paid. In order to recover child
support paid, the former payer must obtain a court declaration of parentage,
and seek repayment of the amounts paid to the child’s carer. The role of
determining the parentage of a child will remain with the courts. As with the
present legislative provisions, a person who believes that they are not the
parent of the child they are supporting under a child support assessment must
make application to a court for a declaration that the child support assessment
should not have been made. Instead of the non-parent then being required to
make a separate application seeking repayment of amounts paid, the court must
proceed as soon as is practicable to consider making an order under section 143
about repayment. This is in order to minimise court costs and uncertainty for
both parties. Accordingly, this Schedule also inserts subsection 107(6) which
requires the court to consider immediately whether any repayments should be
made.
This
Schedule also amends section 143 of the Child Support Registration and
Collection Act, and clarifies the factors a court must consider when deciding
whether or not to order that child support should be repaid. These factors
allow the court to consider the situation of all parties, including the
biological father, and to consider all aspects of the relationship between the
former payer and the child in determining whether the child support mistakenly
paid should be repaid. However, even if a payer obtains a court order that the
payee should repay amounts of child support, their position in terms of
enforcement of the order is subject to the former payee’s resources.
Accordingly, the former payer’s ability to enforce this order may be quite
limited. By contrast, the Registrar has powers to intervene to recover debts
from a payer under a child support assessment using powers to access bank
accounts, tax returns and wages. This Schedule amends the definition and
application of a registrable maintenance liability. In particular, an
order under section 143 for a former payee to repay child support to a former
payer becomes a registrable maintenance liability. This means that a former
payer of a child support liability is put in the same position as the former
payee where the former payer is owed repayment of a child support related debt.
PAYEE
PRIVATE ENFORCEMENT OF CHILD SUPPORT DEBTS
Currently,
a payee who has registered a child support liability for collection with the
Registrar assigns responsibility for the debt entirely. If such a payee is
involved in court action to resolve, for example, the division of property, he
or she must ask the Registrar to intervene in relation to the child support
matters. Such a payee has no power to require the Registrar to take any
particular step. A payee may opt for private collection, and cease to have the
liability registered with the Registrar for collection. However, a payee
cannot take action to enforce the debt, while the ongoing liability is
registered with the Registrar for collection.
The
present amendments allow the payee to take private enforcement action, in
relation to child support debts, while the Registrar may undertake other
enforcement action at the same time. This results in benefits for payees, is
efficient in terms of court time and saves administrative costs.
Explanation of
the changes
Part
1 - Amendments
Child
Support Assessment Act
Item
1 omits from
paragraph 76(3)(aa) ‘,subject to subsection 98(3)’. This change is
required because section 98 is being repealed.
Item
2 repeals paragraph 76(3)(b). This
paragraph provides that a notice of assessment must draw the attention of the
carer entitled to child support parent and the liable parent to the right to
apply to a court for review in certain circumstances. As court review is being
replaced, in the first instance, with review by the SSAT, this paragraph is no
longer relevant.
Item
3 repeals the heading of Part 6A and
substitutes:
Part
6A – Departure from administrative assessment of child support (departure
determinations)
Item
4 repeals and substitutes Division 1
of Part 6A.
Division
1 – Preliminary
New
section 98A sets out a simplified outline of Part 6A.
Item
5 omits from the note at the end of
subsection 98B(1) the word ‘Note’ and substitutes ‘Note 1’.
Item
6 adds at the end of subsection
98B(1) a further note. Section 98B provides that a parent may apply for a
determination that the provisions of the Act dealing with administrative
assessments should be departed from in relation to the child. This section
does not include any time limits on such an application. This note clarifies
that the Registrar may only make a determination under this Part in respect of
a day that is more than 18 months earlier than the day on which the relevant
application is made with a court’s leave under section 112. This relates to
the amendments to subsection 98S(3B) below.
Item
7 omits from the note at the end of
subsection 98K(1) the word ‘Note’ and substitutes ‘Note 1’.
Item
8 adds at the end of subsection
98K(1) a further note. Section 98K provides that the Registrar may initiate a
determination under Part 6A. This section does not include any time limits on
such an application. This note clarifies that the Registrar may only make a
determination under this Part in respect of a day that is more than 18 months
earlier than the day on which the relevant application is made with a court’s
leave under section 112. This relates to the amendments to subsection 98S(3B)
below.
Item
9 omits from subsection 98S(1)
the words ‘Subject to section 98A, the’ and substitutes ‘The’. This change is
required because section 98A now sets out a simplified outline of Part 6A
and does not have any effect on section 98S.
Item
10 inserts at the end of
subsection 98S(1) a note which states that there are limitations on the
Registrar making a determination that varies an annual rate of child support
below the minimum annual rate of child support (see section 98SA).
Item
11 inserts after subsection 98S(3A)
new subsections 98S(3B) and (3C). Subsection 98S(3B) provides that the
Registrar may only make a determination under Part 6A that is in respect of a
day in a child support period that is more than 18 months earlier than the day
on which the liable parent or carer lodged the application under section 98B,
or the Registrar notified the relevant parties under subsection 98M(1) if the
court has granted leave for such a determination under section 112.
Subsection
98S(3C) provides that if a court has granted leave under section 112, the
Registrar may only make a determination in respect of a day if the day is
within the period specified by the court. For example, if the court specifies
that the change of assessment may be backdated for up to three years, the
Registrar cannot make a determination that is backdated for longer than three
years.
Item
12 inserts at the end of Division 4
of Part 6A a new section 98SA. Subsection 98SA(1) provides that the
Registrar must not make a determination that varies, or has the effect of
varying, the child support payable by a liable parent in respect of a day to
less than the minimum annual rate of child support. Subsection 98SA(2)
creates an exception to the general rule in subsection 98SA(1) and
provides that the Registrar may make a determination that varies, or has the
effect of varying, the child support payable by a liable parent to less than
the minimum annual rate of child support if section 66 does not apply in
relation to the child. Section 98SA will be amended by the amendments
which will commence on 1 July 2008.
Item
13 inserts at the end of section 107
a new subsection 107(6). It provides that if the court grants the declaration,
the court must, as soon as practicable, consider making an order under section
143. In other words, as soon as the court grants the declaration that the
person is not a parent of the child, the court must consider whether to make an
order that the payee is to pay back certain amounts of child support (see item
23).
Item
14 repeals and substitutes Division
3 of Part 7.
Division
3 - Application for amendment of administrative assessment that is more than 18
months old
New
section 110 sets out a simplified outline of Division 3.
New
section 111 deals with applications by a parent or carer.
Subsection 111(1) provides that a liable parent or a carer entitled to
child support may apply to a court for leave for the Registrar to make a
determination under section 98S, or for a court to make an order under
section 118, that the determination or order can be backdated for longer
than 18 months, but for less than seven years. Subsection 111(2) sets out
that, subject to the Registrar’s right to intervene in proceedings, the parties
to the application under subsection 111(1) are the applicant and either the
liable parent or the carer entitled to child support. Subsection 111(3) deals
with applications by the Registrar and provides that the Registrar may apply to
a court for leave to make a determination that is backdated for longer than
18 months, but less than seven years. Subsection 111(4) provides that the
parties to the application under subsection 111(3) are the applicant (that is,
the Registrar), and either the liable parent or the carer entitled to child
support.
New
section 112 provides that a court may grant leave to amend an administrative
assessment that is more than 18 months old. Subsection 112(1) provides
that the court may grant leave for the Registrar to make a determination under
section 98S, or for the court to make an order under section 118.
Subsection
112(2) provides that the court may proceed to consider the matter under section
118 at the same time as it considers whether to grant leave, if the court
considers it would be in the interests of the parties to do so.
Subsection
112(3) provides that the court may otherwise grant leave for the Registrar to
make a determination under section 98S.
Subsection
112(4) sets out the matters that the court must consider, including the
responsibility for any delay in making an application or determination, and any
hardship to the applicant and other parties (other than the Registrar) if leave
is granted. Subsection 112(5) provides that the court may consider any other
factors.
Subsection
112(6) provides that the court must specify the period in respect of which the
Registrar may make a determination, or the court may make an order. Subsection
112(7) provides that the period specified in subsection 112(6) must not
include a day in a child support period if the day is more than seven years
earlier than the day on which the application under section 111 was made and is
not limited by the terms of that application. In other words, even if the
liable parent or carer, or the Registrar specified in their application that
any order should relate to a period of two years, the court is not limited by
this, and make choose another period, such as five years prior to the date of
application. However, the court is still limited to making this period less
than seven years prior to the date of application.
Subsection 112(8)
provides that the granting of leave under subsection 112(1) does not imply
that the Registrar is required to make a determination or that the court is
required to make an order.
New
section 113 provides that when a decision of a court is made under Division 3,
the Registrar must immediately take such action (if any) as is needed to give
effect to the decision.
Section
113A provides that subject to any stay orders made, the fact that a proceeding
is pending under this Division does not, in the meantime, interfere with or
affect, any administrative assessment made in relation to the person. It also
provides that any such assessment may be registered under the Child Support
Registration and Collection Act, and amounts of child support and other amounts
recovered in relation to the assessment as if no proceeding were pending.
Item
15 repeals the heading of Division 4
of Part 7 and substitutes:
Division
4 - Orders for departure from administrative assessment in special
circumstances (departure orders)
Item
16 inserts before section 114 new
section 113B, which sets out a simplified outline of Division 4.
Item
17 repeals section 115. Because the
range of matters in relation to which courts will have jurisdiction is more
limited as a result of this Bill, section 115 is no longer correct.
Item
18 repeals and replaces subsections
116(1), (1A) and (1B) with new subsection 116(1). New subsection 116(1) sets
out the matters in relation to which a person may apply to a court. Because
the SSAT will be established in order to review many matters (see Schedule 3),
direct applications to the court will be limited. As with the current
subsection 116(1), the person must first go through the internal review
procedure. Subsection 116(1) provides that a person may apply to a court
if:
(a)
all of the following apply:
(i)
the Registrar has refused to make
a departure determination, under section 98E or 98R because the matters are too
complex to be dealt with administratively; and
(ii)
an objection to the refusal has
been lodged under section 80 of the Child Support Registration and Collection
Act; and
(iii)
the Registrar has disallowed the
objection; or
(b)
both of the following apply:
(i)
the person is a liable parent
carer entitled to child support who is a party to an application pending in a
court;
(ii)
the court is satisfied that it
would be in the interest of the carer entitled to child support and the liable
parent for the court to consider whether an order should be made under this
Division in relation to the child in the special circumstances of the case.
That
is, if there are other matters before the court that involve one or the other
of the parents, for example, family law or bankruptcy matters, then the parent
can ask the court also to consider the child support matter, without first
going through internal review. The court may consider whether to hear the
child support matter together with the other matter. If the court chooses not
to hear the child support matter, the parent must go through the internal
review processes. In accordance with paragraph 116(1)(a), the parent may
appeal to the court after the internal review process is complete if he or
meets one of the conditions in paragraph 116(1)(a). If the court chooses to
hear the child support matter, regardless of whether the other matter is
finalised before the child support matter is heard, the court retains its
jurisdiction in relation to the child support matter. The inclusion of the
words in the present paragraph 116(1B)(b) ‘at the same time as it hears
that application’ does not allow this.
Alternatively,
a person may apply to a court in the situation set out in paragraph 116(1)(c),
which provides that in the case of a liable parent, the administrative
assessment of child support payable by the liable parent for the child is made
under subsection 66(1). That is, a person may apply if under subsection
66(1) the amount of child support payable by that person has been determined to
be the minimum annual rate. As subsection 66(1) only applies to a payer, a
payee cannot apply under paragraph 116(1)(c).
Two
notes following the section explain that the orders a court may make are set
out in section 118, and that the court may make an order for a period that is
more than 18 months ago if the court gives leave.
Applications
made under subsection 116(1) must only relate to a period 18 months
prior to the date of application. If the applicant wants the court to consider
a period longer than 18 months, but less than seven years, in accordance with
section 111, he or she must apply to the court for leave for a court order, or
departure determination to be made in relation to a period longer than 18
months prior to the day of application.
Item 19
inserts after subsection 118(2A) new subsections 118(2B) and (2C).
Subsection 118(2B) provides that a court may only make an order under this
Division in respect of a day in a child support period that is more than
18 months earlier than the day on which the application for that order is
made under section 116 if the court has granted leave under section 112.
Subsection 118(2C) provides that the court may only make an order if it is
within the period specified by the court, under subsection 112(6), in the order
granting leave. Subsections 118(2B) and 118(2C), together with subsection 116(1),
ensure that applications to, and orders by, the court cannot relate to a period
longer than 18 months prior to the application unless the process in
sections 111 and 112 is followed.
Item
20 amends subsection 123(3) by
omitting ‘Division 4 (Orders for departure from administrative assessment in
special circumstances)’ and substitute ‘Division 3 (administrative assessments
more than 18 months old) or Division 4 (departure orders)’. This change
ensures that the court must determine any application for orders in relation to
administrative assessments more than 18 months old before considering any
applications for provision of child support otherwise than in the form of
periodic amounts paid to carer.
Item
21 inserts after paragraph 124(2)(a)
a new paragraph 124(2)(aa). It provides that in determining orders for
provision of child support otherwise than in the form of periodic amounts, the
court must consider any determination in force under Part 6A (departure
determinations) in relation to the child, the carer entitled to child support
and the liable parent. Item 21 is to ensure that the court considers
all the circumstances, including any changes to the child support assessment,
when making orders for child support to be paid non-periodically.
Item
22 omits from
paragraph 124(2)(b) the words ‘(Orders for departure from administrative
assessment in special circumstances)’ and substitutes ‘(departure orders)’.
Item
23 inserts after subsection 143(3)
new subsections 143(3A) and (3B). Subsection 143(3A) provides that it applies
if a payer has paid child support to the payee, and the court has made a
declaration under section 107 that the administrative assessment of child
support should not have been made for that child the court must consider whether
to make an order for repayment of child support, and if so whether the amount
is to be repaid by instalments or in a lump sum. In that case, the court must
have regard to the matters set out in subsection 143(3B).
Subsection 143(3A) does not limit subsection 143(3). The matters set out
in subsection 143(3B) are:
(a)
whether the payee or the payer
knew, or ought reasonably to have known, that the parent was not a parent of
the child;
(b)
whether the payer or payee
engaged in any conduct that directly or indirectly resulted in the application
for administrative assessment of child support for the child being accepted by
the Registrar;
(c)
whether there was any delay by
the payer in applying under section 107 for a parentage declaration once he or
she knew, or should reasonably have known, that he or she was not the parent of
the child;
(d)
whether there is any other child
support that is, or may become, payable to the payee for the child by the
person who is the parent of the child;
(e)
the relationship between the
payer and the child;
(f)
the financial circumstances of
the payee and the payer.
Child Support Registration and Collection Act
Item
24 amends the definition of registrable
maintenance liability in subsection 4(1) by inserting ', 17A’ after
‘17’. This change is required because an order under section 143 for a payee
to repay child support to the payer where the payer was not a parent of a child
will become a registrable maintenance liability (see item 25).
Item
25 inserts after section 17 a new
section 17A. Section 17A provides that if a liability is a liability of a
person (the payer) to pay an amount to another person (the payee), and resulted
from the payer being granted a declaration under section 107 that he or
she was not a parent of the child, and the court made an order under section
143 requiring the person who received the child support to repay some or all of
it, that liability is a registrable maintenance liability. In other words, payer
and payee, for the purposes of section 17A have a different meaning to
what they usually do for child support purposes.
Item
26 amends paragraph 19(2)(a) by
inserting ', 17A’ after ‘17’. This change is required because an order under
section 143 for a payee to repay child support to the payer where the payer was
not a parent of a child will become a registrable maintenance liability (see item
25).
Item
27 repeals and substitutes
subsection 30(3). The current subsection 30(3) provides that if a
registrable maintenance liability is registered under the Child Support
Registration and Collection Act, the payee is not entitled to, and may not
enforce payment of, amounts payable under the liability. This means that that
payee cannot bring enforcement proceedings in a court in relation to a child
support debt. New subsection 30(3) also provides that if a registrable
maintenance liability is registered under the Child Support Registration and
Collection Act, the payee is not entitled to, and may not enforce payment of,
amounts payable under the liability. However, it creates an exception to this
general prohibition where the payee takes enforcement action under
section 113A (see item 39) to recover a debt due in relation to the
liability.
Item
28 inserts after
subsection 37B(7) a further subsection 37B(7A).
Subsection 37B(7A) provides that section 37B does not prevent a payee
of a registered maintenance liability from instituting a proceeding under
section 113A during a low-income non-enforcement period to recover a debt
due in relation to the liability. In general, a registered maintenance
liability which is a debt under subsection 30(1) is not to be enforced by
the Registrar during a low-income non-enforcement period. However, this change
ensures that a payee can take action to recover a child support debt during a
low-income non-enforcement period. Private enforcement proceedings brought by
the payee may allow the payer to apply for the court to vary the order for child
maintenance, given the payer’s circumstances.
Item
29 omits from section 70
‘where’ and substitutes ‘(1) If’. This change is required because of the
insertion of a new subsection 70(1).
Item
30 adds at the end of
section 70 a new subsection 70(2). Subsection 70(2) provides
that apportionment of payment between payees does not apply to amounts paid to
the Registrar in accordance with a court order made in relation to a proceeding
instituted by a payee of a registered maintenance liability under section 113A
to recover a debt due in relation to the liability. This ensures that a payee,
who has taken court action to recover child support debts, still receives any
money recovered, even if the money is paid first to the Registrar, rather than
directly to the payee himself or herself.
Item
31 amends paragraph 71AA(1)(a),
which provides that the Registrar may offset debts where two persons each have
a child support debt arising from a liability referred to in section 17, by
inserting ', 17A’ after ‘17’. This change is required because an order under
section 143 for a payee to repay child support to the payer where the payer was
not a parent of a child will become a registrable maintenance liability . This
amendment may mean that in a child support case, there may be one person with a
debt under section 17, and one person with a debt under section 17A. These
debts can be offset against each other.
Item
32 repeals and substitutes
paragraphs 71AA(b) and (c). Currently, paragraph 71AA(b) deals with
debts that arose in respect of a registered maintenance liability that provided
for child support. However, a section 17A debt is a debt that a person is
repaying because the person was not entitled to receive the child support from
the person to whom they are repaying the debt. Consequently, new
paragraph 71AA(b) removes the reference to a debt being in relation to
child support, and provides that the Registrar may offset debts if in respect
of each debt, the Commonwealth would be required, under section 76 to pay
the amount paid by one of the persons to the other person.
Paragraph 71AA(1)(c) deals with the matters that are currently dealt with
in paragraph 71AA(1)(b). It provides an additional requirement that the
Registrar may only offset debts if in respect of a debt that arose from a
liability referred to in section 17 – the liability provided for child
support for a child of the two persons.
Subsection 72AA(1)
is limited to the Registrar requesting that deductions be made from social
security pensions or benefits in relation to liabilities under
subsection 17(2). However, subsection 72AA(2) is broad enough to
allow the Registrar to request that deductions be made from a social security
pension or benefit where a person has a liability under section 17A.
Item
33 repeals and substitutes paragraph
72D(1)(c). New paragraph 72D(1)(c) extends the Registrar’s power to make
departure prohibition orders on the grounds that the person has persistently
and without reasonable grounds failed to pay child support from liabilities
under section 17, to liabilities under section 17A also. This change is
required because an order under section 143 for a payee to repay child support
to the payer where the payer was not a parent of a child will become a
registrable maintenance liability.
Item
34 repeals and substitutes
subsection 72D(2), which sets out the matters to which the Registrar must
have regard when deciding whether paragraph 72D(1)(c) is made out.
Paragraphs 72D(2)(a), (b) and (e) are identical to the current paragraphs 72D(2)(c),
(b) and (d). However, current paragraph 72D(2)(a) is no longer
appropriate because it requires the Registrar to consider the number of
occasions on which the debt has not been paid. This is still appropriate for
debts arising from a registrable maintenance liability under section 17,
which occur because a payer has not paid child support on one or more
occasions. However, a registrable maintenance liability arising under
section 17A is a debt which occurs once, when a court order is made.
Accordingly, paragraph 72D(2)(c), which deals with section 17
liabilities, requires the Registrar to consider the number of occasions on
which the debt had not been paid. Paragraph 72D(2)(d), which deals with
section 17A debts, requires the Registrar to consider the length of time
during which the debt has remained unpaid.
Item
35 amends paragraph 72E(a), which
provides that for the purposes of Part VA, a child support liability is a
registrable maintenance liability mentioned in section 17, by inserting ', 17A’
after ‘17’. This change is required because an order under section 143 for a
payee to repay child support to the payer where the payer was not a parent of a
child will become a registrable maintenance liability.
Item
36 inserts before Part IX:
Part
VIIIB – Other provisions relating to courts
Section
111A sets out a simplified outline of Part VIIIB.
Section
111B sets out the general powers of court. Subsection 111B(1) sets out
what a court may do in exercising its powers under the Child Support Registration
and Collection Act. It also reflects the powers that a court may exercise
under section 141 of the Child Support Assessment Act.
Subsection 111B(2) provides that the making of an order of the kind
referred to in paragraph 111B(1)(c), that is, an order that a specified
transfer or settlement of property be made, does not prevent the court from
making a subsequent order (whether under this Act or otherwise) in relation to
the child. Subsection 111B(3) provides that the applicable Rules of Court
may make provision with respect to the making of orders under this Act for the
purpose of facilitating their enforcement and the collection of any child
support payable under them.
Section 111C
sets out the powers of a court to make stay orders. Subsections 111C(1)
and (2) set out the situations in which section 111C applies, and provide
that a party to a proceeding before a court, before the Registrar under Part
VII, or before the SSAT under Part VIIA may apply to either the court in which
the proceedings are initiated, or a court having jurisdiction, for a stay
order. Subsection 111C(3) provides that pending the hearing and final
determination of the proceeding, the court may make such orders as it considers
appropriate, staying or otherwise affecting the operation or implementation of
the Child Support Assessment Act. The court must take into account the
interests of the persons who may be affected by the outcome of the proceeding.
Subsection 111C(4) provides that the court may make a further order
varying or revoking a stay order it has made. Subsection 111C(5) provides
that a stay order made by the court is subject to any terms and conditions
specified in the order, and operates for such period as is specified, or until
the decision of the court determining the proceeding becomes final.
Subsection 111C(6) provides that for the purposes of
subparagraph 11C(5)(b)(i), that is, for such period as is specified in a
court order, a decision of the Registrar becomes final at the end of the period
within which an application could have been made to the SSAT under Part VIIIA,
if an application has not been made within that period.
Section 111D
provides that copies of an order are to be forwarded to the Registrar.
Subsection 111D(1) provides that if a court makes an order under the Child
Support Registration and Collection Act, the court’s registrar or other
responsible officer must within 28 days after the order is made, send a
certified or sealed copy to the Child Support Registrar.
Subsection 111D(2) provides that the Registrar may, by written notice
served on the registrar of the court or other responsible officer, vary the
requirements in subsection 111D(1). This means that the Registrar may
specify that the court can provide orders in another form, for example, by fax,
email or telephone.
Section 111E
provides that the Registrar may intervene in proceedings. If the Registrar
does intervene in any proceedings, the Registrar is taken to be a party to the
proceedings with all the rights, duties and liabilities of a party. For
example, costs may be awarded against the Registrar if he or she intervenes in
proceedings. Subsection 111E(3) provides that section 111E does not
limit Part IX of the Family Law Act. Part IX deals with the right of
other people to intervene in cases, for example, the right of the
Attorney-General to intervene in cases in the public interest, and the right of
child welfare officers to intervene in cases affecting child welfare.
Section 111E does not apply in relation to proceedings before the SSAT,
because the Registrar is automatically a party to SSAT proceedings (see section
102).
Section 111F
provides that if, in relation to a proceeding instituted under
section 113A, the court makes an order for payment of an amount, the court
may specify in the order that payment may be made to either the payee or the
Registrar.
Section 111G
makes it clear that if a person has instituted proceedings, or is joined as a
party under the Child Support Registration and Collection Act, and the
Registrar is not a party to the proceeding, the Commonwealth is not liable for
costs in the proceeding.
Item 37
repeals and substitutes subsection 113(1). New subsection 113(1) is
similar to the current subsection 113(1) but adds that in relation to
debts due by a payer may being sued for and recovered by the Registrar, the
payee may also undertake recovery action in accordance with section 113A.
Item
38 amends subsection 113(2) by
inserting after ‘taken’ the words ‘by the Registrar’. This amendment makes
clear that the Registrar need only take appropriate steps to keep the payee
informed of recovery action, undertaken by the Registrar and not a payee. A
note states that a heading is also added to subsection 113(2): ‘Registrar
to keep payee informed of action taken to recover debt’.
Item
39 inserts a new section 113A,
which deals with recovery of debts by a payee. Subsection 113A(1)
provides that a payee of a registered maintenance liability who wants to sue to
recover a child support debt must notify the Registrar in writing of his or her
intention to institute proceedings to recover the debt:
(a)
at least 14 days before
instituting proceedings; or
(b)
in exceptional circumstances,
within such shorter period as the court allows.
This
requirement is to ensure that the Registrar is aware of enforcement action that
is being taken in relation to a child support debt, so that the Registrar can
accordingly make decisions about his or her own enforcement action. The
shorter notification period in paragraph 113A(1)(b) is to deal with
situations such as where the payee becomes aware that the payer is about to
deal with a major asset, such as property, and wants to take action urgently to
recover child support debts. A note following subsection 113A(1) explains
that for provisions relating to proceedings instituted under this section, see
sections 111F and 111G.
Subsection 113A(2)
provides that the payee is to notify the Registrar of orders made and payments
received. A payee of a registered maintenance liability who has instituted
proceedings under subsection 113A(1) must notify the Registrar, in the
manner specified by the Registrar, of:
(a)
any orders, including costs
orders, made by the court in relation to the payee and the debt due in relation
to the liability; and
(b)
any payments received by the
payee from the payer under any such orders
within
14 days of the order being made or the payment being received. A note
following subsection 113A(2) explains that section 16A provides for
the Registrar to specify the manner in which a notice may be given.
Subsection 113A(3)
provides that the payee commits an offence if he or she does not comply with
the obligations set out in subsection 113A(2). The reason for this is
that the Registrar needs to be informed of any orders made or payments received
so that the Registrar can amend the Register accordingly. If the Registrar is
not informed of any successful enforcement action taken by a payee, the
Registrar may take enforcement action for the same amounts against the payer,
with the result that the payer may pay the same debt twice. This could lead to
the payee being paid more than the amount to which he or she is entitled.
Subsection 113A(4) provides that this offence is one of strict liability
and the penalty is 10 penalty units. Strict liability is an appropriate basis for the offence
because of:
- the difficulty the prosecution would have in
proving fault (especially knowledge or intention) in this case;
- the fact that the offence is minor; and
- the fact that the offence does not involve
dishonesty or other serious imputation affecting the person’s reputation.
Subsection 113A(5)
provides that it is a defence to an offence committed under subsection 113A(3)
if the person charged proves that the person gave notice to the Registrar as
soon as reasonably practicable after becoming aware of the making or
registration of the relevant order or the receipt of the relevant payment, as
the case may be. This is to ensure that the offence in subsection 113A(3)
does not apply in an unfair way, if there are genuine reasons why a person did
not immediately give notice to the Registrar about the court order.
Item
40 inserts after
subsection 120(1) a new subsection 120(1A). It provides that a court
having jurisdiction under the Child Support Registration and Collection Act
may, in a proceeding instituted by a payee of a registered maintenance
liability under section 113A, exercise all of the powers of the Registrar
under subsection 120(1). This gives any court undertaking enforcement at
a payee’s instigation, powers to obtain information and evidence.
Item
41 amends subsection 102(3) by
inserting after ‘subsection (1)’ ‘, or by a court in accordance with
subsection (1A)’. This extends the offence in that subsection of failing
to comply with a requirement made by the Registrar in relation to information
and evidence to a requirement made by the court in relation to information and
evidence.
Part
2 – Application provisions
Item
42 sets out the application of the
items in Schedule 3. It provides that the amendments made by items 11, 14,
17, 18 and 19, applications for amendment of administrative assessments
more than 18 months old, apply in respect of:
(a)
applications made under section
98B after this Schedule commences;
(b)
determinations in respect of
which the parties were notified under section 98M after this Schedule commences
(that is, after 1 January 2007). In other words, if a person is notified
under section 98M before 1 January 2007, then the current procedure – that the
Registrar may make a determination for an almost unlimited past period –
applies.
(c)
an application made under
section 116 after this Schedule commences (that is, after 1 January 2007),
even if the application relates to a decision made before that date to make or
refuse to make a determination under Part 6A, or to make an administrative
assessment under subsection 66(1).
Item
43 provides that the amendments made
by items 13 and 23, that is, the requirement for the court to consider,
once it has made a declaration that a payer is not a parent of the child,
making a repayment order under section 143, and the consideration itself
under section 143, apply in respect of parentage declarations made under
section 107 after commencement.
Item
44 provides that the amendments made
by items 24 to 26 and 31 to 35, that is, the changes setting out that an
order made under section 143 is a registrable maintenance liability, apply from
the commencement date of this Schedule, whether the order made under section
143 was made before or after the commencement of this Schedule.
Item
45 sets out the application
arrangements for the amendments made by items 27 and 37 to 41, that is,
the amendments relating to a payee’s ability to take enforcement action. It
provides that the amendments apply to debts due to the Commonwealth under the
Child Support Registration and Collection Act that are outstanding on and after
the commencement of this Part (that is, 1 January 2007), whether the debt
arose before or after the commencement of this Schedule.
Item
46 sets out the application
arrangements of the amendments in relation to Western Australian exnuptial
children. Under the Constitution, the Commonwealth child support legislation
applies in the states in relation to exnuptial children only if the states
either refer to the Commonwealth their power to make such laws, or adopt the
relevant Commonwealth laws. All states have referred their power except
Western Australia, which has chosen instead to adopt the child support
legislation from time to time through a series of Acts.
Therefore,
these amendments will apply in relation to exnuptial children in Western
Australia only when the amendments have been adopted. Therefore, the
application provisions discussed above are modified so that they generally
apply to applications to a court or the Registrar made after the date of
adoption, with matters in train at the date of adoption being treated in the
same way as matters in train at 1 January 2007 for all other cases, as
discussed above.
Schedule 5 – Amendments relating to child support
agreements and court orders (commencing on 1 July 2008)
Summary
This
Schedule will provide more flexible arrangements, with better legal protection,
for parents who want to make agreements between themselves about the payment of
child support, will detail how lump sum payments are treated, and will provide
for the effect of agreements on family tax benefit payments. It will also
provide a simplified process to allow parents to suspend child support payments
for a period of six months if they reconcile, and then resume the payments
should they separate again, without having to apply anew.
Background
AGREEMENTS
There
will be two types of agreements: binding and limited child support
agreements. Several matters apply to both sorts of agreements.
If
the parents apply to the Registrar to have the child support agreement accepted
within 28 days of the child support agreement’s start date, then acceptance
will be backdated to the start date of the agreement. However, if the parents
apply for acceptance more than 28 days after the agreement’s start date, then
acceptance will only be backdated to the day the parents applied for
acceptance.
The
circumstances in which a court can set aside a child support agreement are set
out in section 136.
BINDING
AGREEMENTS
Each
party to the agreement must have received legal advice before entering the
agreement, and must also receive legal advice before terminating the
agreement. This change brings the child support arrangements in relation to
binding agreements into harmony with financial agreements concerning property
division and spousal maintenance under the Family Law Act. Placing these
amendments into the child support legislation means that separated parents who
were not married, as well as those parents who were married, can make binding
agreements about their child support arrangements. The amount agreed on by the
parents may be more or less than the amount that the payer would be assessed as
paying under the notional assessment.
LIMITED
AGREEMENTS
Parents
who have not had legal advice about the effect of a child support agreement can
enter a limited child support agreement. In order to provide safeguards on
parents’ interests, in the absence of legal advice, limited agreements are of
limited duration and can be terminated or set aside by the courts, in certain
circumstances. Limited agreements can also be terminated by either parent if
the notional amount of child support payable changes by more than 15%, or after
three years.
An
administrative assessment must be in place before a limited child support
agreement can be accepted by the Registrar. The annual rate of child support
payable under the agreement must be at least the annual rate of child support
payable under Part 5, or otherwise payable as a result of a change of
assessment, court order or prior agreement.
LUMP
SUM CHILD SUPPORT
This
Schedule includes amendments giving effect to the recommendations in the
Taskforce Report on lump sum payments of child support. The child support
legislation already recognises that parents may make private agreements for the
payment of child support in the form of periodic payments or otherwise. A lump
sum may be paid under one of those agreements and these amendments do not
essentially alter those arrangements, apart from clarifying them as distinct
from the new lump sum arrangements being inserted.
This
Schedule clarifies that the type of lump sum already recognised in the child
support legislation is made under provisions of an agreement characterised as non-periodic
payment provisions. These provisions must provide for the annual child
support payable under any administrative assessment by the liable parent who is
a party to the agreement to be reduced in whole or part, either as a dollar
reduction in the annual rate payable or a percentage reduction. These
provisions generally operate for a period specified in the agreement or, if not
specified, until the child support case ends. Lump sums recognised in this way
may be paid under either a binding or a limited child support agreement.
The
new lump sum arrangements recommended by the Taskforce Report must arise from a
binding child support agreement and the lump sum must at least equal the value
of the total annual child support payable under an administrative assessment.
This type of lump sum (made under provisions of an agreement characterised as lump
sum payment provisions) will not reduce the annual child support payable
under the administrative assessment, but will instead be credited against the
payer’s liability annually until the full value of the lump sum (indexed
annually according to the Consumer Price Index to protect the value of the lump
sum over time) has been credited. At this point, ongoing child support
payments will resume. This type of lump sum will generally be credited in this
way for 100% of the annual child support payable, but may, if the agreement so
provides, be credited at a specified percentage below 100%, in which case the
payer would continue to make reduced ongoing child support payments, although
the child support technically payable under the assessment would still be the
full amount (that is, disregarding the lump sum).
Further
amendments make sure that an order made by a court that provides for a lump sum
payment is also characterised as one of these two types of lump sum, so that
there is consistent treatment under the legislation, whether the lump sum is
paid under an agreement or a court order.
Amendments
that reflect the effect of the new lump sum arrangements for family tax benefit
are discussed elsewhere.
NOTIONAL
ASSESSMENTS
Presently,
entitlement to Family Tax Benefit (FTB) Part A is worked out on the basis of
the agreement the parents make between themselves. In order to protect
government revenue, Centrelink will, in practice, only approve agreements if
the amount or value of the agreement is equal to, or more than, the amount of
the liability that would result if there had been an administrative
assessment. This discourages many parents from making agreements, where one
parent may accept a lesser amount of child support in return for other
concessions, for example, possession of the family home.
In
order to remove this block on agreements, the Child Support Assessment Act and
the Family Assistance Act will be amended to provide that, once a child support
agreement has been accepted, FTB Part A will be assessed on the notional
assessed amount of child support. The notional assessed amount of child
support is the amount that would have been paid but for the existence of the
agreement between the parents.
Notional
amounts will be reviewed on request by either parent if the parents are party
to a limited child support agreement, , or every three years if no review has
been done within that three year period, or in any case, if the amount of child
support that is payable under the child support agreement or court order for a
day in the child support agreement changes by more than 15% from the previous
day. For example, if the child support agreement contains a clause dealing
with the situation where the payer loses his or her job and, as a result, pays
more than 15% less child support, the Registrar must make a new provisional
notional assessment (see section 146F). At these times, the CSA will
calculate a provisional notional assessment based on incomes for the last
relevant year of income (that is, the financial year that last ended prior to
the day on which the three year period ends, or the review is requested by
either parent) and the most recent information available to the CSA about the
level of care of each parent. The notional assessment will be determined in
the same manner as an administrative assessment of child support under Part 5
of the Child Support Assessment Act.
Parents
will be advised by the Registrar of this provisional notional assessment and
will then have 14 days to alter the information used in calculating that
amount. For the purposes of the notional amount, parents can use the normal
estimate provisions set out in section 60 of the Child Support Assessment Act
to estimate their current income for the 12 months from the date of review.
That is, the parents may use the estimate provisions if their income is 15%
less than the income used in the provisional notional amount. Such estimates
will be able to be reviewed but will not be required to be reconciled, under
the reconciliation process in section 60.
Parents
can also advise of a change to the level of care on the basis of care for the
12 months from the date of review. This ensures that the notional assessment
accurately reflects the current situation of care between the parents. This
will have consequences for the parents’ entitlement to FTB Part A.
Parents will be able to access the full change of assessment process in
relation to notional assessments.
After
14 days or when such elections have been finalised, whichever is the later, the
provisional notional assessment will then be confirmed. The parents will have
a right to object to the calculation of the notional assessment. That is, the
parents can provide further information about the provisional notional
assessment and then object, using the internal objections process, to the final
notional assessment.
For
example:
Henry and Chan make a binding child support agreement
in relation to their two children. Henry’s income at the time when he and Chan
separate is $70,000. Their child support agreement provides that he will pay
$1,000 per month. However, the notional assessment is that he should pay
$2,000 per month. Henry loses his job and he starts receiving income support
payments from Centrelink. The agreement contains a clause that Henry’s
payments under the agreement are to reduce to $30 per month while he is on
income support payments. The Registrar acts on this clause and reduces the
amount payable by the payer under the agreement to $30 per month. This is a
change which is greater than 15%, therefore, the Registrar also reassesses the
notional amount. The notional amount is recalculated so that it is based on
Henry’s current income, leading to a new notional amount of the minimum rate of
child support per month. The notional assessment would be based on Henry’s
last relevant year of income which would still be a higher amount. However, as
Henry is receiving income support payments, Part 5 provides that the assessment
would be the minimum annual rate of child support. In any case, Henry could
provide an estimate of income once he received his provisional notional
amount. Centrelink will assess Chan’s entitlement to FTB on the basis of the
new notional amount.
NOTIONAL ASSESSMENTS AND FAMILY TAX BENEFIT
The
maintenance income test (MIT) is relevant for the purposes of working out an
individual’s rate of FTB Part A under the Family Assistance Act. The MIT is
set out in Division 5 of Part 2 of Schedule 1 and is supported by a number
of definitions in subsection 3(1) of the Family Assistance Act. It is an
annual means test that has regard to maintenance income actually received in a
relevant income (financial) year.
The
first step in the MIT is to work out the annualised amount of the individual’s
maintenance income, disregarding specified amounts. Clause 20A of
Schedule 1 sets out a process for annualising an individual’s maintenance
income except for capitalised maintenance income which is dealt with under the
apportionment rules in clause 24 of Schedule 1. If an individual is a member
of a couple, the individual’s maintenance income is the sum of the annualised
maintenance income of the individual and the annualised maintenance income of
their partner (clause 21 of Schedule 1 to the Family Assistance Act refers).
The
concept of maintenance income is defined in subsection 3(1) as including
child maintenance, partner maintenance and direct child maintenance received
by the individual. For individuals who choose to receive their FTB payments on
a fortnightly basis by instalments, the MIT is initially applied on the basis
of an estimate of maintenance income as determined by the Secretary (on the
basis of information provided by the customer and the Child Support Agency) and
under authority of subsection 20(3) of the Family Assistance
Administration Act. After the end of the income year, a process of
reconciliation occurs whereby an individual’s rate of FTB is reassessed as
appropriate on the basis of actual maintenance income received in the relevant
income year (and actual ATI as assessed by the Commissioner for Taxation and
any other relevant facts).
Explanation of the changes
Part 1 – Main amendments
Division 1 – Binding and limited child support agreements
Child
Support Assessment Act
Item
1 inserts into section 5 a
definition of binding child support agreement, and provides that it has
the meaning given by section 80C.
Item
2 inserts into section 5 a
definition of limited child support agreement, and provides that it has
the meaning given by section 80E.
Item
3 inserts into section 5 a
definition of termination agreement and provides that it has the meaning
given by section 80D.
Item
4 repeals and substitutes section
34B. Section 34B deals with the situation where child support is already
payable for a child (that is, the Registrar has already made an administrative
assessment of child support), but an agreement to pay child support is made in
relation to the child and will affect the annual rate of child support
payable. Section 34B, therefore, applies to all limited child support
agreements (see Subdivision B below) and applies to some binding child support
agreements (see Subdivision A below). However, new subsection 34B(2)
deals with when the child support agreement will start, when child support is
already payable. The period of time for which a child support assessment can
be backdated is being limited to provide parents with certainty about their
child support assessment. The change also more clearly sets out when a child
support agreement takes effect. Item 14 below deals with when a child
support agreement will start when child support is not already payable. Subsection
34B(2) provides that the child support period starts:
(a)
if the application for acceptance
was made to the Registrar within 28 days after the day on which the agreement
was signed, the agreement states that child support is to be payable from a specified
day and that day is not earlier than the day on which child support first
became payable, on the specified day. For example, Prashant and Jenny sign a
child support agreement on 20 August 2008. Prashant applies to the Registrar
for acceptance of the agreement on 23 August 2008. It is stated to come into
effect on 5 July 2008. Child support first became payable on
1 July 2008. The child support period starts on 5 July 2008.
(b)
if the application for acceptance
of the agreement was made to the Registrar within 28 days after the day on
which the agreement was signed, and the agreement states that child support is
to be payable from a specified day, and the day specified is earlier than the
day on which child support first became payable, on the day child support first
became payable. For example, Danielle and Giles sign a child support agreement
on 20 August 2008. Danielle applies to the Registrar for acceptance of the
agreement on 23 August 2008. The agreement is stated to come into effect on 25
June 2007. However, child support was not payable under the administrative
assessment until 14 July 2007. The child support period starts on 14 July
2007.
(c)
if the application for acceptance
of the agreement was made to the Registrar within 28 days after the day on
which the agreement was signed and the agreement does not specify a day from
which child support is to be payable, the day on which the agreement was
signed.
(d)
Otherwise (that is, if
application for acceptance of the agreement was not made within 28 days after
the day on which the agreement was signed), on the day on which application was
made to the Registrar for acceptance of the agreement.
Item
5 repeals Division 1 of Part 6 and
substitutes the following sections.
Division
1 – Preliminary
New
section 80A sets out a simplified outline of Part 6.
New
section 80B provides that Part 6 applies to cases where the parents of an
eligible child, or a parent or the parents of an eligible child and a non‑parent
carer of the child, want to give effect to an agreement between themselves in
relation to child support payable for the child.
Division
1A – Binding and limited child support agreements
Subdivision
A – Binding child support agreements
Section
80C sets out the requirements which must be met in order for a child support
agreement to be a binding child support agreement. Subsection 80C(1)
provides that the agreement is binding if it is in accordance with the
requirements in subsection 80C(2), and also provides that the agreement
must comply with subsection 81(2). The requirements in
subsection 80C(2) are:
(a)
the agreement must be in writing;
(b)
the agreement be signed by the
parties to the agreement;
(c)
the agreement must contain a
statement, in relation to each of the parties to the agreement, that they have
had legal advice about the agreement’s effect and its advantages and
disadvantages;
(d)
the agreement must include an
annexure containing a signed certificate signed by the person providing the
legal advice stating that the advice was provided;
(e)
the agreement must not have been
terminated under section 80D; and
(f)
after the agreement is signed,
each of the parties is given either the original or a copy of the original.
Section
80CA provides that a binding child support agreement must not be varied. A
note explains, however, that a new binding child support agreement can
incorporate by reference the terms of a previous agreement. This means that
the process of making a new child support agreement can be simpler and easier
than drafting a new agreement to cover all of the matters of the original
agreement.
Section
80D deals with terminating binding child support agreements. Subsection 80D(1)
provides that a binding child support agreement may only be terminated by:
(a)
a provision in a new binding
child support agreement to the effect that the previous agreement is
terminated;
(b)
the parties make a termination
agreement (the requirements of which are set out in subsection 80D(2)); or
(c)
a court order setting aside the
agreement under section 136.
The
requirements of subsection 80D(2) are that:
(a)
the agreement must be in writing;
(b)
the agreement be signed by the
parties to the agreement;
(c)
the agreement must contain a
statement, in relation to each of the parties to the agreement, that they have
had legal advice about the agreement’s effect and its advantages and
disadvantages;
(d)
the agreement must include an
annexure containing a signed certificate signed by the person providing the
legal advice stating that the advice was provided;
(e)
the agreement has not been set
aside by a court under section 136;
(f)
after the agreement is signed,
each of the parties is given either the original or a copy of the original.
A
note following subsection 80D(2) explains that the manner in which the
contents of a termination agreement may be proved is set out in section 48
of the Evidence Act 1995.
Subsection
80D(3) sets out that a binding child support agreement is terminated on:
(a)
if the parties have made a new
binding child support agreement which specifies a day on which it is to take
effect, that day. Otherwise (that is, if the new agreement does not specify a
date of effect), the day the new agreement is signed;
(b)
if the parties make a termination
agreement which specifies a day on which it is to take effect, that day.
Otherwise, (that is, if the termination agreement does not specify a date of
effect), the day the new termination agreement is signed;
(c)
if a court sets aside the
agreement under section 135, the day on which the court order takes effect.
Subdivision
B – Limited child support agreements
Section
80E deals with matters related to the making of limited child support
agreements. Subsection 80E(1) provides that an agreement is a limited
child support agreement if it is in writing, is signed by the parties to the
agreement, if it complies with subsection 81(2) (see comments below) and it
meets the conditions in subsection 80E(2), (3) or (4) as the case
requires, and assuming that the agreement is accepted by the Registrar. A note
following the subsection states that there must be an administrative assessment
in force in relation to the child in relation to whom the agreement is made
(see item 11 below). Another fundamental requirement of limited child
support agreements is that the amount of child support payable under the
agreement must be more than the amount of child support which would be assessed
as being payable under Part 5. As Centrelink will no longer be approving child
support agreements, one safeguard which prevented agreements which were unfair
for the carer, liable parent or children, from being entered has been removed.
Binding child support agreements have the safeguard of the parties having
received legal advice. For limited child support agreements, this safeguard is
provided by the agreed amount having to exceed the assessment amount,
Subsection
80E(2) provides that if child support is payable from one party to the
agreement to another party to the agreement, on the day on which application is
made to the Registrar for acceptance of the agreement, the annual rate of child
support that is so payable on that day must be at least the annual rate of
child support that would be so payable on the day if that rate were calculated
under Part 5, or otherwise payable as a result of a change of assessment, court
order of prior agreement.
For
example:
Prashant and Jenny sign a document . They sign the
document on 18 August 2008, and apply to the Registrar for acceptance
of that agreement on 20 August 2008. The agreement states that child
support in accordance with its terms is payable from the date of acceptance.
The agreement states that Jenny is to pay Prashant $65 per week. However,
under the administrative assessment, Jenny should pay Prashant $135 per week.
The document does not meet the condition under subsection 80E(2) that the child
support under the agreement must be more than the assessed amount, and would not
be accepted.
Subsection 80E(3)
provides that if child support is not to be payable from one party to the
agreement to another party to the agreement, on the day on which application is
made to the Registrar for acceptance of the agreement, the annual rate of child
support that is so payable on the day on which the agreement commences is at
least the annual rate of child support that would be so payable on that day if
the rate were calculated under Part 5, or otherwise payable as a result of a
change of assessment, court order or prior agreement.
For
example:
Danielle and Giles sign a limited child support
agreement on 18 July 2008. It is not expressed to come into effect until 1
September 2008. They apply to the Registrar for acceptance of the agreement on
21 July 2008. The agreement states that on 01 September 2008, the
amount of child support that Giles is to pay to Danielle is $300 per week.
Under the administrative assessment that would be in force on 1 September
2008, Giles should pay Danielle $260 per week. Consequently, the agreement meets
the condition under subsection 80E(3).
Subsection
80E(4) provides that if child support is payable from one party to the
agreement to another party, for a period before the day on which application is
made to the Registrar for acceptance of the agreement, the amount of child
support that is so payable for that period must be at least the amount of child
support that would be so payable for that period if the annual rate of child
support were calculated under Part 5 or otherwise payable as a result of a
change of assessment, court order or prior agreement. An agreement may cover
one or more past periods. The amount of child support payable in relation to a
past period does not need to be more than the rate calculated for each
individual period, so long as it is more than the cumulative amount for all of
the periods.
Subsection 80E(5)
provides that the regulations may, for the purposes of subsections 80E(2), (3)
and (4), provide a method of converting an amount of child support that is
payable under an agreement otherwise than in the form of periodic amounts into
an annual rate of child support. Such details have tended to be addressed by
regulations, rather than primary legislation, under the child support scheme.
Section
80F provides that a limited child support agreement cannot be varied. However,
a new limited child support agreement can incorporate by reference the terms of
a previous child support agreement. This means that the process of making a
new child support agreement can be simpler and easier than drafting a new
agreement to cover all of the matters of the original agreement.
Section
80G deals with terminating limited child support agreements.
Subsection 80G(1) provides that a limited child agreement may only be
terminated by:
(a)
a provision being included in a
new limited or binding child support agreement to the effect that the previous
agreement is terminated;
(b)
the parties to the previous
agreement making a written agreement that is signed by those parties to the
effect that the agreement is terminated;
(c)
a court order setting aside the
previous agreement under section 136;
(d)
if the notional assessment (see
Division 3 of this Schedule) of the amount of child support that would have
been payable from one party to the agreement to another party is varied by more
than 15% from the previous notional assessment in circumstances not
contemplated by the agreement, for example, one party loses his or her job and
starts receiving a social security payment. In that case, the agreement is
terminated if a party to the agreement gives the Registrar written notice of
the termination of the agreement; or
(e)
if the previous agreement was
made three or more years earlier – a party to the previous agreement giving the
Registrar written notice of the termination of the previous agreement.
Subsection
80G(2) sets out that a limited child support agreement is terminated on:
(a)
if the parties have made a new
binding child support agreement which specifies a day on which it is to take
effect, that day. Otherwise (that is, if the new agreement does not specify a
date of effect), the day the new agreement is signed;
(b)
if the parties make a termination
agreement which specifies a day on which it is to take effect, that day.
Otherwise, (that is, if the termination does not specify a date of effect), the
day the new agreement is signed;
(c)
if a court sets aside the
agreement under section 135, the day on which the court order takes effect.
Subsection 80G(3)
provides that if a limited child support agreement is terminated because the
notional assessment of the child support payable by one party changes by more
than 15% from the previous notional assessment, or more than three years has
passed since the agreement was made, and a party gives the Registrar written
notice of the termination, the Registrar must notify the other parties in
writing of the termination.
Subsection 80G(4)
provides that the notice must include, or be accompanied by, a statement to the
effect that the party may, subject to the Child Support Registration and
Collection Act, object to the decision to terminate the agreement.
Paragraph 80G(4)(b) provides that if the person is aggrieved by a later
decision on an objection (no matter who lodged the objection), that person may
apply to the SSAT. This ensures that if the other party lodged the objection,
and the matter is resolved to that person’s satisfaction, the person referred
to in paragraph 80G(4)(b) does not lose his or her right to apply to the
SSAT for review of the decision.
Item 6
repeals and substitutes section 81. New subsection 81(1) provides that an
agreement is a child support agreement if it is a binding child support
agreement or a limited child support agreement. Subsection 81(2) provides that
a child support agreement is a limited or binding child support agreement if it
complies with sections 82, 83 and 84. A note following section 81
explains that a parenting plan under the Family Law Act may, subject to the
requirements of this Division, be a child support agreement.
Item
7 repeals section 85. This section
is no longer required because the formal requirements for agreements are set
out in Subdivisions A and B (see above).
Item
8 repeals and substitutes paragraph 88(a).
New paragraph 88(a) provides that an application for acceptance by the
Registrar of an agreement made in relation to child support is properly made if
the agreement is a child support agreement, or a termination agreement or
written agreement referred to in paragraph 80G(1)(b). Item 11
omits from section 91 ‘a child support agreement’ and inserts ‘an
agreement referred to in paragraph 88(a)’. These changes are required
because parties to a child support agreement will be required to lodge a termination
agreement or a written agreement providing that a child support agreement is
terminated with the Registrar for acceptance.
Item
9 omits ‘(1)’ from subsection
89(1). Item 10 repeals subsection 89(4). Item 12 repeals
section 91A, which sets out the procedure where the payee is in receipt of, or
a claimant for, FTB. These changes are being made because the effect of child
support agreements on FTB will now be dealt with by notional assessments (see
Division 3 of this Schedule).
Item 13 repeals subsections
92(3) and (4) and substitutes a new subsection 92(3). New subsection
92(3) provides that the Registrar must refuse to accept a limited child support
agreement if, immediately before the application for acceptance of the
agreement is made, no administrative assessment is in force in relation to the
child.
Item
14 repeals and substitutes paragraph
93(1)(g). New paragraph 93(1)(g) provides that child support is payable from
the day on which the application was made to the Registrar for acceptance of
the agreement. Paragraph 93(1)(h) provides that child support is payable
until the earlier of the day immediately before the day on which a child
support terminating event happens in relation to the child, the carer entitled
to child support, the liable parent or all three of them; or, the day on which
the agreement is terminated under section 80D or 80G.
Item
15 omits from subsection 93(2) the
words ‘the period mentioned in paragraph (1)(g) starts’ and substitutes ‘on
which the application was made to the Registrar for acceptance of the
agreement’. This is in order to be consistent with new paragraph 93(1)(g).
Item
16 repeals and substitutes the note
at the end of subsection 93(2). The new note refers to the fact that the
Registrar must assess, under section 34B, the annual rate of child support
payable under an agreement if an annual rate of child support is already
payable and the agreement is to affect that annual rate.
Item
17 repeals and substitutes section 94.
Subsection 94(1) provides that after the Registrar accepts a child support
agreement made in relation to a child, the Registrar must immediately take such
further action (if any) as is necessary to give effect to the agreement. A
note states that this means the Registrar may assess, under section 34B or
93 or Part 5, the annual rate of child support payable under an agreement if an
annual rate of child support already payable and the agreement is to affect
that annual rate. Subsection 94(2) provides that in making any
administrative assessment in relation to the child, the Registrar must act in
accordance with section 95, which sets out the effect of certain provisions of
accepted child support agreements. Subsection 94(3) provides that after the
Registrar accepts a termination agreement or a written agreement providing that
a child support agreement is terminated, the Registrar must immediately take
such further action as is necessary to give effect to the agreement.
Item
18 repeals Division 6 of Part 6.
This is because child support agreements are not permitted to be varied under
the new provisions (see sections 80CA and 80F).
Item
19 omits from paragraph 94U(4)(a)
‘94’ and substitutes ‘93’. This change is required because now section 93,
rather than section 94, deals with when a child support agreement begins.
Item
20 omits from the simplified outline
in section 98W (which is inserted by Schedule 3, and which will commence on 1
January 2007) the dot point which deals with the court’s powers in relation to
child support agreements. Item 20 then inserts dot points which
set out a court’s power in relation to child support agreements under this
Schedule (that is, after 1 July 2008).
Item
21 adds at the end of subsection
116(1) a third note, which provides that a court may make an order under
Division 4 if the court sets aside a child support agreement under section 136.
Item
22 omits from paragraph 124(2)(c)
‘benefit; and’, and substitutes ‘benefit’. Item 23 repeals paragraph
124(2)(d), which refers to the effect of making an application under section
128. These changes are required because section 128 itself if being repealed.
Item 24 repeals section 128. Section 128 of the Child Support Assessment Act
has been one of the most significant obstacles standing in the way of payment
of child support as a lump sum. It provides that if a court orders that a
liable parent pay child support in a manner other than by periodic payments,
and if the carer is receiving an income tested pension, allowance or benefit,
the carer may apply to have the assessed child support reduced. This was
intended to ensure that a carer who is receiving a pension, allowance or
benefit is always entitled to receive at least 75% of his or her assessed child
support by way of periodic amounts, without losing entitlement to the pension,
allowance or benefit. However, amendments to the social security legislation
introduced after the commencement of the
Child Support Assessment Act changed the way in which maintenance
income is considered, and special maintenance income alone could not reduce the
carer’s benefit or pension below 75% of the maximum rate of the pension or
benefit. Parents may want to make a lump sum payment, for example, to allow
the carer to keep the matrimonial home. However, section 128 could mean that
only 25% of the value of the lump sum paid can be credited against the periodic
assessment.
For example:
A lump sum agreement provides that a payment of $10,000
by the payer is to reduce his assessment by $5,000 for two years. The payer’s
current assessment is $7,500 thus payment in addition to the amount from the
lump sum is $2,500 per year. The payee is in receipt of Centrelink benefits.
If an application under section 128 is accepted, under this agreement the payer
pays $5,625 per month, and only $1,875 is credited from the lump sum because
the amount which the payer is liable to pay cannot be reduced by more than 25%.
This
situation discourages parents from making lump sum agreements, and gives
parents less flexibility in their child support arrangements.
Item
25 repeals paragraph 129(3)(b),
which refers to an application under section 128. Item 26 omits from
subsection 129(8) ‘3(b) or (d)’ and substitutes ‘(3)(d)’. These changes are
required because section 128 itself is being repealed (item 24).
Item 27 repeals and
substitutes section 135. New section 135 sets out a simplified outline of
Division 6.
Item 28 repeals and
substitutes section 136. Subsection 136(1) provides that section 136
deals with the power of a court to set aside child support agreements or
termination agreements. Subsection 136(2) provides that the court may set
aside an agreement if the court is satisfied that:
(a)
the agreement of a party or
parties was obtained by fraud or a failure to disclose material information;
(b)
another party to the agreement,
or someone acting for another party, exerted undue influence or duress in
obtaining that agreement, or engaged in unconscionable or other conduct;
(c)
because of a significant change
of circumstances of one of the parties to the agreement, or a child in respect
of whom the agreement is made, it would be unjust not to set aside the
agreement; or
(d)
the agreement provides for an
annual rate of child support that is not proper or adequate, taking into
account all the circumstances of the case, including the financial
circumstances of the parties to the agreement.
Subsection
136(3) provides that, subject to the Registrar’s right to intervene in
proceedings, the parties to the proceedings under subsection 134(1) are the
parties to the agreement.
Subsection
136(4) provides that if the court sets aside a child support agreement, and the
court is satisfied that one or more of the grounds for departure exists (see
paragraph 117(1)(b)), the court may make an order under Division 4 of Part 7
without an application having been made under section 116.
Item 29 omits from subsection
137(1) the words ‘a child support agreement’ and substitutes ‘an agreement’.
Division 2 – Lump sum payments
Family
Assistance Act
Item
30 repeals and substitutes
subparagraphs 8(5)(b)(i) and (ii) of the Family Assistance Act in a
consequential amendment to the FTB maintenance income test provision
identifying the value of an individual’s benefit from a child support
agreement. The amendment clarifies that the benefit is the amount, specified
in non-periodic payment provisions of an agreement, by which the annual rate of
child support payable under any relevant administrative assessment is to be
reduced.
Child
Support Assessment Act
Items
31, 32 and 33 insert new definitions
into section 5 of the Child Support Assessment Act. The new definitions of lump
sum payment provisions (that is, the new type of lump sum arrangement) and non‑periodic
payment provisions (that is, the current type of lump sum arrangement)
signpost the new and amended rules in paragraphs 84(1)(e) and (d)
respectively. The new definition of otherwise than in the form of periodic
amounts is relevant for the current type of lump sum arrangement and for
arrangements under other agreements that do not involve periodic payments. The
latter definition makes clear that child support paid either in the form of a
lump sum, or as a transfer or settlement of property, is covered within this
description.
Item
34 inserts a new paragraph (ga) into
subsection 76(2) of the Child Support Assessment Act in relation to the new
type of lump sum arrangement, to complement current paragraph (f) in relation
to the current type of lump sum arrangement. Subsection 76(2) sets out matters
that must be specified in a notice to each party when the Registrar makes an
administrative assessment (including an amended assessment). The amendment
will make sure that, when the parties to a new type of lump sum agreement (or
court order) are notified about their administrative assessment, the notice
includes relevant details about the lump sum, including the remaining lump sum
payment after crediting has been applied under the Child Support Registration and
Collection Act, and whether any amounts of child support are still payable
despite the crediting arrangement that will take place at the end of the year
of income (that is, if the lump sum is being credited at less than 100% of the
annual rate of child support payable).
Item
35 inserts new paragraph 76(3)(ca),
to add to the current list of statements that must be included in a notice
under section 76. New paragraph (ca) will require the notice to include a
statement drawing to attention the right of the parties to apply for an order
under new section 123A that child support be provided in one of the new type of
lump sum arrangements.
Items
36 and 37 insert new subsection
78(2). This will ensure that an amount of child support payable under an
administrative assessment is taken to be paid when due, to the extent that some
or all of that amount will be credited (at the end of the year of income) under
new section 69A of the Child Support Registration and Collection Act, inserted
by item 58, against the payer’s liability. This avoids any implication,
just because the amount is not actually credited until the end of the year of
income, that the amount is not paid when due.
Item
38 makes a key amendment to the
Child Support Assessment Act in repealing and substituting section 84, which
specifies the provisions that may be included in agreements – if an agreement
does not meet section 84, it cannot be a child support agreement and
cannot be accepted by the Registrar. The new section clarifies certain aspects
of the descriptions of the currently recognised agreement provisions, including
lump sums under non‑periodic payment provisions, as defined. It also
introduces the new concept of lump sum payment provisions.
In clarifying the lump sums under non-periodic
payment provisions (new paragraph 84(1)(d) and subsection 84(6)), the amendment
removes a misleading reference to the lump sum amount being credited
against the liability (because the concept of crediting is to apply strictly to
the new type of lump sum arrangements). It stipulates instead that the effect
is for the annual rate of child support payable under any administrative
assessment to be reduced in whole or part, either by a specified annual dollar
amount or by a specified percentage. This makes the current arrangement
clearer and is not a substantive change.
In
introducing the lump sums under lump sum payment provisions (new paragraph
84(1)(e) and subsections 84(7) and (8)), the amendment stipulates that the
agreement must be a binding one, there must be an administrative assessment in
force for the parties immediately before one or other of them applies for
acceptance of the agreement, and the lump sum (which must be specified in the
agreement) is for at least the annual rate of child support payable under the
assessment in force at that time. The agreement may specify a rate of
crediting of the lump sum that is less than 100%, in which case the payer would
continue to make reduced ongoing child support payments, although the child
support technically payable under the assessment would still be the full amount
(that is, disregarding the lump sum). Otherwise, the assumption is that
crediting is intended to apply at 100% of the administrative assessment.
New
paragraph 84(1)(f) reproduces current paragraph 84(1)(d) in relation to other
types of agreement provisions – those that provide for child support but not as
periodic payments, non-periodic payments or a lump sum. This type of agreement
is rare and amounts paid under it would neither reduce the annual child support
payable under any relevant administrative assessment, nor be credited against
the liability.
Otherwise,
the substituted section 84 reproduces the unaffected provisions of the current
section. For example, new subsection 84(2) effectively provides that an
agreement may include provisions of more than one kind, applying at different
times. It should also be noted, although not explicit, that an agreement could
provide different provisions in relation to different children.
Item
39 repeals subsections 95(3) and (4)
of the Child Support Assessment Act and substitutes a new subsection (3). This
section describes the effect under the Act of certain provisions of accepted
child support agreements. New subsection 95(3) essentially allows the
current lump sum arrangements to reduce the annual child support payable under
the administrative assessment. The amendment therefore makes it clear that, in
relation to lump sums, the subsection relates to what are now described as
non-periodic payment provisions and not lump sum payment provisions (because
the latter do not reduce the annual child support payable under the
administrative assessment). The substituted subsection 95(3) also removes the
misleading reference to the lump sum amount being credited against the
liability. The remaining elements of the substituted subsections are now
superfluous.
Item 40
adds a new subsection (4) to section 96 of the Child Support Assessment Act.
Section 96 requires the Registrar to give notice of a decision to accept or
refuse to accept an agreement made in relation to a child. If the agreement is
one that includes lump sum payment provisions, the new subsection requires the
notice to include details of the lump sum amount and any annual and daily rate
of child support still payable despite the crediting arrangement (that is, if
the lump sum is being credited at less than 100% of the annual rate of child
support payable under the administrative assessment). Such a notice would be
sent only once, on acceptance of the agreement. Any revisions to the details
would be dealt with in a notice under section 76, as amended (see item 34
above), should the administrative assessment be amended.
Items
41 to 54 make complementary
amendments to the provisions of the Child Support Assessment Act dealing with
orders that may be made by a court that child support be provided in a way
other than periodic payments (Division 5 of Part 7). Insofar as those
provisions currently relate to lump sum child support, a court is able to make
an order only for the current type of lump sum, equating to the non-periodic
payment provisions of the child support agreement regime as now amended. These
further amendments add provisions equating to the new type of lump sum under
lump sum payment provisions of a child support agreement, and clarify the
distinction between the two types of order under Division 5.
Item
41 repeals and substitutes
subsection 123(1) to clarify that a person may apply to court for an order
either that child support be provided otherwise than in the form of periodic
payments (which would encompass the current type of lump sum payment) or that
child support be provided in the form of a lump sum payment to be credited
against the liability (equating to the new type of lump sum payment).
Item
42 makes it clear that the rule in
subsection 123(2), that application for an order may only be made if an
administrative assessment is in force, applies to an application for both types
of order.
Item
44 restricts the current provision
about the order the court may make (section 124) to applying only to an
application under new paragraph 123(1)(a), that is, for an order that child
support be provided otherwise than in the form of periodic payments (which
would encompass the current type of lump sum payment).
Item
43 inserts new section 123A,
detailing the order the court may make in relation to an application under new
paragraph 123(1)(b), that is, for an order that child support be provided
in the form of a lump sum payment to be credited against the liability
(equating to the new type of lump sum payment).
The
new section is equivalent to the current section 124, including in relation to
the merit criteria that must apply (that the court is satisfied that it would
be just and equitable as regards the child, the carer and the liable parent,
and otherwise proper, to make the order), but has been modified in relation to
most details of the order to equate to the new type of lump sum payment under
the child support agreement provisions. That is, the lump sum (which must be
specified in the order) must be for at least the annual rate of child support
payable and the order must specify a rate of crediting of the lump sum of 100%
or less under the administrative assessment (or a default of 100% will apply
under new section 69A of the Child Support Registration and Collection Act,
inserted by item 58). If less than 100%, the payer would continue to
make reduced ongoing child support payments, although the child support
technically payable under the assessment would still be the full amount (that
is, disregarding the lump sum), as a note makes clear.
Item
45 repeals and substitutes subsections
125(1), (2) and (3). Section 125 requires the court to state in the order
certain details about the relationship between the order and the assessed child
support. This amendment serves two purposes. Firstly, it restricts section
125 to applying only to an order made under section 124 as amended, that is, an
order that child support be provided otherwise than in the form of periodic
payments (which would encompass the current type of lump sum payment). This is
appropriate because an order under new section 123A, that is, that child
support be provided in the form of a lump sum payment to be credited against
the liability (equating to the new type of lump sum payment), cannot reduce the
assessed child support and so there are no details in the section 125 context
for the court to state. Secondly, the amendment clarifies the language of
these provisions, especially to remove the misleading reference to the lump sum
amount being credited against the liability (because the concept of
crediting is to apply strictly to the new type of lump sum arrangements now
dealt with in new section 123A).
Items
46 and 47 make amendments to apply
section 126 correctly to the new type of lump sum arrangements now dealt with
in section 123A. Section 126 obliges a court to give reasons for an order
under section 124. This will now extend to the new type of order, in which
case, the court will need to specify relevant matters – that is, the amount of
the lump sum payment and the percentage rate of crediting.
Items
48 to 54 make similar amendments to
sections 127, 129, 130 and 131, to ensure that those provisions apply correctly
to one or both of the two types of lump sum arrangements. Some of these items
include related technical corrections to the language used in the relevant
sections.
Child
Support Registration and Collection Act
Item
55 inserts into the Child Support
Registration and Collection a definition of regular care (linking to the
definition in the Child Support Assessment Act).
Item
56 inserts into section 4 of the
Child Support Registration and Collection Act a definition of remaining lump
sum payment, reflecting the meaning of that term in new section 69A for the
purposes of other provisions.
Item
57 inserts new subsection 66(3) of
the Child Support Registration and Collection Act. This will ensure that no
debt arises in respect of an amount of child support payable under an
administrative assessment that will be credited (at the end of the year of
income) under new section 69A, inserted by item 58, against the
payer’s liability. This is done by taking the amount (of 100% or less of the
amount payable under the liability for the relevant period) to be paid when
due. This avoids any implication, just because the amount is not actually
credited until the end of the year of income, that a debt arises.
Item
58 inserts into the Child Support
Registration and Collection Act the key section 69A. This describes the
process by which a new type of lump sum payment will be credited against the
liability. Conceptually, because this type of lump sum payment does not reduce
the child support payable under the administrative assessment, the crediting
mechanism is a method of recovery of a child support debt, as it is in
the existing provisions relating to non‑Agency payments, sections 71, 71A
and 71C, and the process is similar. That is, for each relevant period, an
amount will be credited against the liability equal to the percentage of the
liability specified in the agreement or order (or, if no percentage was
specified, 100%), and the balance of the lump sum will be reduced to reflect
the crediting.
As
in section 71C, section 69A will apply crediting in relation to each initial
period or payment period for the liability. An initial period is the
period (if any) between the liability first becoming enforceable under the
Child Support Registration and Collection Act and the beginning of the first
regular payment period. A payment period is whichever regular period (whether
a week, fortnight, four-week period, month or calendar month) is established
for collection of amounts under the liability (whether by deduction from salary
or wages or by voluntary payments).
The
distinct features of the crediting under new section 69A, however, are that:
·
although the crediting will be in
respect of each initial period and payment period, the crediting will actually
occur only once per year, at the end of the year of income;
·
the crediting will relate to the
past period since the agreement was accepted or since the last crediting; and
·
the balance of the lump sum, that
is, the uncredited portion, will be indexed according to the Consumer Price
Index each 1 January, to maintain the value of the lump sum closer to the level
it would have had had it been invested over the period in question; the
resulting amount will be known as the remaining lump sum payment.
The
fact that the crediting will actually occur only once per year, and
retrospectively, will not alter the requirement for the Registrar to notify the
parties (as required under new Child Support Assessment Act provisions,
subsection 96(4) on acceptance of the agreement, and
paragraph 76(2)(ga) on any revision of the child support assessment) of
the balance of the lump sum payment and any child support remaining payable.
Any notification under new paragraph 76(2)(ga) that occurs in between the
actual crediting described by new section 69A of the Child Support Registration
and Collection Act will essentially be describing a notional level of child support
still payable (noting that the child support technically payable under the
assessment would still be the full amount, that is, disregarding the lump
sum). Technically, because of the amendments made by items 37 and 57,
the amounts to be credited will be taken to have been paid when due.
The
crediting mechanism provided by new section 69A will apply to a lump sum
arising under lump sum payment provisions of a child support agreement (as
described in new paragraph 84(1)(e)) or under a court order under new section
123A, and when the Registrar has been notified that the lump sum has actually
been paid as stipulated.
The
indexation of the lump sum payment is built into new section 69A and will
operate on 1 January each year, based on the preceding September quarter figure
as referenced to the highest September quarter figure before that but after the
agreement was accepted or order made. The indexation will never operate to
reduce the lump sum payment. This indexation process is consistent with
comparable social security law indexation provisions.
As
the balance of the lump sum approaches zero, parents will be notified that they
need to begin paying child support in cash or make other arrangements. This
will normally occur prior to the end of the agreement term (the end being when
the lump sum is completely depleted), when notice will be issued, advising of
the new amount payable. The case will be closely monitored to ensure that the
end date of the agreement can be adjusted if there is a variation to the
underlying assessment.
The
concept of maintenance income, as defined in subsection 3(1) of the
Family Assistance Act, is currently based on actual receipt (directly or
indirectly). Item 61 modifies the child maintenance component of the
definition so that an individual’s maintenance income from child maintenance is
worked out under new clause 20B or 20C in specified circumstances. The
existing focus on actual receipt would continue to be relevant in relation to
any maintenance income of the individual (or their partner) not covered by new
clauses 20B and 20C (for example, partner maintenance) and would also continue
to be relevant for the purposes of determining an individual’s FTB Part A rate
where the individual’s (or their partner’s) child support liability is assessed
under the child support formula and the payee has an administrative assessment
under Part 5 of the Child Support Assessment Act in force.
Item
59 makes a consequential amendment
to the definition of capitalised maintenance income so that it does not
apply to maintenance income that is child maintenance to which new clause 20B
or 20C applies.
Items
60 and 62 insert new definitions of child
support agreement and notional assessment into subsection 3(1) of
the Family Assistance Act. A child support agreement has the same
meaning as given by section 81 of the Child Support Assessment Act while the
concept of notional assessment has the same meaning as given by section
146E of that Act.
Item
63 inserts new clauses 20B and 20C
into Schedule 1 to the Family Assistance Act. These new provisions outline the
rules for working out an individual’s maintenance income from child maintenance
in prescribed circumstances. The individual’s maintenance income as worked out
under these new provisions, along with any other maintenance income of the
individual, would then be subject to the application of the MIT, as set out in
the method statement in clause 20 of Schedule 1 to the Family Assistance Act.
There
are two conditions that trigger the application of new clause 20B of Schedule
1. The first is that child maintenance is payable to an individual under a
child support agreement or a court order. Second, there must be, in relation
to the agreement or order, a notional assessment of the annual rate of child
support that would be payable to the individual for a child for a particular
day in a child support period if the annual rate were worked out under Part 5
of the Child Support Assessment Act (instead of under the agreement or
order).
Where
these conditions are met, the amount of the individual’s child maintenance
under the agreement or order is worked out using new clause 20B.
The
general rule is that the individual is deemed to have received the amount of
child maintenance for a child for a period that the individual would have
received if he or she had received the annual rate of child support for the
child for the period under the individual’s notional assessment. This rule is
in new subclause 20B(2). The deemed amount is referred to as the notional
assessed amount.
An
exception (where the full notional assessed amount would not count as the
individual’s maintenance income from child maintenance for FTB purposes) would
be where the amount received by the individual is less than the amount payable
to the individual under the child support agreement or order (such that a debt
arises for the period). Where this happens, the amount deemed to be the
individual’s child maintenance for the child for the period would be the
proportion of the notional assessed amount commensurate with the proportion of
the amount of child maintenance received. This exception is set out in new
clause 20B(3).
For example, if the individual’s notional assessment
for the year would be $5,000 and the agreement amount for the year is $4,000,
but the individual payee receives nil via CSA collection, 0% of $5,000 is
counted as the individual’s child maintenance for the year (that is, nil).
Similarly, if only $2,000 is received via CSA collection, then 50% of $5,000 is
counted (that is, $2,500). The outcome is similar where the individual’s
notional assessment is less than the child support agreement amount. If, for
example, the individual’s notional assessment for the year would be $5,000 and
the agreement amount for the year is $8,000, but the payee receives nil via CSA
collection, 0% of $5,000 is counted as the individual’s child maintenance (that
is, nil). If only $4,000 is received via CSA collection, then only 50% of
$5,000 is counted (that is, $2,500).
The other exception is where more than the full amount
payable under the child support agreement or court order is received in a given
income year. In this situation, a similar apportionment principle would
apply. However, the relevant rules are expressed in a different way as they
also cover the situation where an individual’s notional assessment changes from
the time that a debt arises (due to underpayment of child support under an
agreement or order) and when an arrears payment is made. The intention is that
the factor derived from the notional and actual amounts in the income year the
underpayment occurred is maintained when arrears are paid in a later income
year. The relevant rules are in new subclauses 20B(4) to (7).
New subclause 20B(4) provides that where an individual
received more than the amount payable under an agreement or order for the child
for a period, then the amount of child maintenance that the individual is taken
to have received is the sum of the notional assessed amount and the total of
the notional arrears amounts in respect of each debt arising under the
agreement or order.
New subclause 20B(5) specifies a
formula under which the notional arrears amount for a particular debt is
determined. The first element of the formula relates to the income year in
which the debt arose and requires the notional amount paid for the child for
the previous period (as referred to in new subclause 20B(3)) to be subtracted
from the notional assessed amount for the child for that previous period and
then divided by the amount of the debt from that previous period. The result
is then multiplied by the amount of the debt that is paid off to arrive at the
notional arrears amount for the particular debt. This calculation process
occurs in relation to each debt covered by the arrears payment in the order,
and with the effect, prescribed in new subclause 20B(6).
Under new subclause 20B(7), the rules in new subclause
20B(3) and (4) that apply where there is an underpayment or arrears payment of
child support will only apply in relation to an enforceable maintenance
liability under the Child Support Registration and Collection Act (that is, in
CSA collection cases).
New clause 20C applies where an individual receives child
maintenance for their FTB child under a lump sum child support agreement (to
which new clause 20B does not apply) or under a court order made under section
123A of the Child Support Assessment Act and where the lump sum payment is
credited against a liability under an administrative assessment under
section 69A of the Child Support Registration and Collection Act. In this
situation, the amount of child maintenance that the individual is taken to have
received in an income year under the agreement or order for the child is the
amount credited for that income year. Any additional child support payable to
the individual under an administrative assessment under Part 5 of the Child
Support Assessment Act would continue to be taken into account as the
maintenance income is actually received, in accordance with existing rules.
These rules are not changing for child maintenance that is payable under an
administrative assessment.
These amendments to the Family Assistance Act apply in
respect of child support agreements whose applications for acceptance are made
after commencement and court orders made after commencement. Item 73 in Part 2 of this Schedule contains the relevant application
provision.
The amendments commence on 1 July 2008 in accordance
with the table in clause 2 of this bill.
Child Support Assessment Act
Item 64 inserts into
subsection 5(1) a definition of notional assessment, and provides
that it has the meaning given by section 146E.
Item 65 inserts into
subsection 5(1) a definition of provisional notional assessment and
provides that it means a provisional notional assessment made under
section 146B.
Item 66 omits from the word
‘Note’ from the end of subsection 34B(1) and inserts ‘Note 1’.
Item 67 adds at the end of
subsection 34B(1) a further note which explains that if the Registrar
makes an assessment under section 34B, the Registrar must make a
provisional notional assessment under section 146B.
Item 68 omits from the word
‘Note’ from the end of subsection 93(2) and inserts ‘Note 1’.
Item 69 adds at the end of
subsection 93(2) a further note which explains that if the Registrar makes
an assessment under section 93, the Registrar must make a provisional
notional assessment under section 146B.
Item 70 adds a note at the
end of subsection 125(1) which explains that if the court makes a
statement under section 125 that the annual rate of child support is to be
reduced, the Registrar must make a provisional notional assessment under
section 146B.
Item 71 inserts after Part 7:
Part
7A – Notional assessments
Division
1 – Preliminary
Section 146A
sets out a simplified outline of Part 7A.
Division 2 – Notional assessments
Section 146B sets out the requirements in
relation to provisional notional assessments. Subsection 146B(1) provides
that the Registrar must make a provisional notional assessment in accordance
with this section if the Registrar makes an assessment under section 34B
or section 93, or a court makes an order under section 125 , in an
order under section 124 that an annual rate of child support payable is to
be reduced. That is, the Registrar must make a provisional notional assessment
in relation to a child support agreement, other than a lump sum agreement, or
if the court orders child support to be paid other than periodically, and
states the relationship between the order and the assessed child support.
Subsection 146B(2)
provides that the Registrar must make a provisional notional assessment of the
annual rate of child support that would be payable for a child for a day in a
child support period by one party to the agreement to each other party to the
agreement if that annual rate were payable under Part 5 (taking into
account any departure determinations or court orders in relation to the
administrative assessment) and not under the agreement. That is, the Registrar
must work out how much child support would have been payable under an
administrative assessment if the parties had not made a child support
agreement.
Subsection 146B(3)
provides that the Registrar must serve notice in writing on each party to the
agreement of the provisional notional assessment.
Subsection 146B(4)
provides that the notice specify the daily rate of the annual rate that is
calculated in the provisional notional assessment, as well as the matters set
out in subsection 76(2). These matters are things such as the names and dates
of birth of the children taken into account in making the assessment, and the
liable parent’s income. Subsection 146B(5) provides that the notice must
include, or be accompanied by, a statement to the effect that:
(a)
the liable parent or the carer
entitled to child support can seek a variation of the provisional notional
assessment in accordance with section 146C within 14 days of receiving the
notice; and
(b)
once the notional assessment
becomes a notional assessment under section 146E, the liable parent and the
carer entitled to child support may, subject to the Child Support Registration
and Collection Act, object to the particulars of the notional assessment; and
(c)
if aggrieved by a later decision
on an objection to those particulars, the liable parent and the carer entitled
to child support may, subject to the Child Support Registration and Collection
Act, apply to the SSAT for review of the later decision.
Section 146C deals with
variation of provisional notional assessments. Subsection 146C(1) provides
that a party to a child support agreement may seek a variation of a provisional
notional assessment within 14 days of the party receiving a notice under
section 146B in respect of the provisional notional assessment:
(a)
by notifying the Registrar of a
change to the percentage of care that the liable parent or the carer entitled
to child support has for the child for the particular day in the child support
period in respect of which the provisional notional assessment is made;
(b)
by making an application under
section 146D for a determination under Part 6A (departure
determinations);
(c)
if the applicant is a parent of
the relevant child—by making an election under subsection 146G(1) (estimate of
adjusted taxable income).
A
note following subsection 146C(1) states that a person who does not
receive a notice that is served on a person is taken to have received the
notice 14 days after the notice was served (see subsection 146E(2)).
Subsection 146C(2)
provides that the Registrar may vary the provisional notional assessment of the
annual rate of child support that would be payable for a child for a day in the
child support period. The Registrar may do this if:
(a)
an applicant seeks a variation in
accordance with subsection (1); and
(b)
any of the following applies:
(i)
if there is a change to the
percentage of care for the particular day in the child support period in
respect of which the provisional notional assessment is made - the Registrar
determines a different percentage of care for the parent or the carer for the
child for the particular day under Division 4 of Part 5;
(ii)
if an applicant makes an
application under section 146D for a determination under Part 6A
(departure determinations) - the Registrar makes a determination in respect of
the child under section 98S;
(iii)
if the applicant is a parent of
the relevant child - by making an election under subsection 146G(1) (estimate
of adjusted taxable income) - the Registrar does not refuse to accept the
election under section 146H.
Subsection 146C(3)
provides that the Registrar may refuse to vary the provisional notional
assessment. The Registrar may refuse to vary the provisional notional
assessment if:
(a)
the liable parent or the carer
entitled to child support seeks a variation to the provisional notional
assessment in accordance with subsection (1); and
(b)
any of the following applies:
(i)
if there is a change to the
percentage of care for the particular day in the child support period in
respect of which the provisional notional assessment is made - the Registrar
determines a different percentage of care for the parent or the carer for the
child for the particular day under Division 4 of Part 5;
(ii)
if an applicant makes an
application under section 146D for a determination under Part 6A
(departure determinations) - the Registrar makes a determination in respect of
the child under section 98S;
(iii)
if the applicant is a parent of
the relevant child - by making an election under subsection 146G(1) (estimate
of adjusted taxable income) - the Registrar does not refuse to accept the
election under section 146H; and
(c) if the liable parent or carer
entitled to child support seeks a variation by doing more than one of the
things mentioned in subsection 146C(1) (that is, by informing the
Registrar of a change in percentage of care, making an application for change
of assessment, or making an election in relation to adjusted taxable income) -
the Registrar has not already varied the provisional notional assessment under
subsection146C (2).
Subsection 146C(4)
provides that the liable parent and the carer entitled to child support are not
entitled to make an application to the SSAT under section 80 of the Child
Support Registration and Collection Act, or to make an application to a court
under section 116, in respect of the making of, or refusal to make, a
determination under Part 6A. A note following subsection 146C(4) states
that instead, an objection can be made to the particulars of the notional assessment
under section 80 of the Child Support Registration and Collection Act. There
are no external review rights in relation to a provisional notional assessment
because a provisional notional assessment does not have legal effect until it
becomes a notional assessment. At that time, as explained in the note,
external review rights are available.
Section 146D
deals with departure determinations in respect of provisional notional
assessments. Subsection 146D(1) provides that a person may, by written
application, ask the Registrar to make a determination under Part 6A
(departure determinations) if:
(a)
a provisional notional assessment
not yet become a notional assessment under section 146E,
(b)
the person is of the view that,
because of special circumstances that exist, the provisions of this Act
relating to administrative assessment of child support should be departed from
for the purposes of making the provisional notional assessment. For example, a
parent may be paying significant private school fees, a child may have special
needs which are being met by a parent or a parent may have special expenses
which affect their capacity to pay child support; and
(c)
the person has not previously
applied under this section in relation to the provisional notional assessment.
Subsection 146D(2)
provides that if a person makes an application under subsection (1),
Division 2 of Part 6A applies as if references in that Division to an
administrative assessment were references to the provisional notional assessment,
and section 98JA (notice to be given to unsuccessful applicant about
Registrar’s refusal to make a determination) did not apply.
Section 146E deals with when a
provisional notional assessment becomes a notional assessment.
Subsection 146E(1) provides that a provisional notional assessment becomes
a notional assessment:
(a)
14 days after the notice of the
provisional notional assessment is received by the parties under
section 146B; or
(b)
if a party to the relevant child
support agreement seeks a variation to the provisional notional assessment in
accordance with section 146C - on the day on which the Registrar varies,
or refuses to vary, the provisional notional assessment under that section.
Subsection 146E(2)
is a deemed service provision and sets out that for the purposes of this
section and section 146C, if a person does not receive a notice served under
section 146B before 14 days after the day on which the notice was served
on the person by post at the person’s last known address, the person is taken
to have received the notice on the fourteenth day. This is a deemed notice
provision, rather than an actual notice provision because once the 14 day time
period has passed, the person is sent a notice about the notional assessment
(see subsection 146E(3)). Review rights flow in relation to the notional
assessment. This means that a person will not lose the opportunity to apply
for a review of a notional assessment, even if the notice in relation to the
provisional notional assessment is not actually received.
Subsection 146E(3)
provides that after a provisional notional assessment becomes a notional
assessment, the Registrar must serve notice in writing of the notional
assessment on the liable parent and the carer entitled to child support.
Subsection 146E(4)
provides that the notice must specify in respect of the notional assessment the
daily rate of the annual rate that is calculated in the notional assessment, as
well as the matters set out in subsection 76(2). These matters are things
such as the names and dates of birth of the children taken into account in
making the assessment, and the liable parent’s income.
Subsection 146E(5)
provides that the notice must include, or be accompanied by, a statement to the
effect that:
(a)
the party may, subject to the
Child Support Registration and Collection Act, object to the particulars of the
notional assessment; and
(b)
if aggrieved by a later decision
on an objection to those particulars, may, subject to that Act, apply to the
SSAT for review of the later decision.
Subsection 146E(6)
provides that a contravention of subsection 146E(4) or (5), for example,
if the notice does not include the daily rate, or does not include the name of
one of the children, does not affect the validity of the decision.
Section 146F
deals with later provisional notional assessments. The Registrar must make a
new provisional notional assessment under section 146B:
(a)
if the relevant child support
agreement continues in force for more than three years—at the end of the three
year period after the most recent notional assessment relating to the agreement
was made; or
(b)
if the relevant child support
agreement was a limited child support agreement—on the request of a party to
the agreement; or
(c)
in any case—if the amount of
child support that is payable under the relevant child support agreement for a
day in the child support period changes by more than 15% from the previous day.
Division
3 – Estimating adjusted taxable income for notional assessments
Section 146G
deals with estimating adjusted taxable income for the purposes of notional
assessments.
Subsection 146G(1)
provides that before a provisional notional assessment relating to a child
becomes a notional assessment under section 146E, a parent of the child
may elect that, for the purposes of making the provisional notional assessment,
the parent’s adjusted taxable income for the 12 month period beginning on the
particular day in the child support period in respect of which the provisional
notional assessment is made is the amount estimated by the parent.
Subsection 146G(2)
sets out a limitation on subsection 146G(1). A parent may not make an
election under this section in relation to a child if an order or determination
referred to in paragraph (a) of the definition of income amount order
(see section 59) is in force in relation to the parent and the particular
day in the child support period in respect of which the provisional notional
assessment is made.
Subsection 146G(3)
provides that the parent may make an election relating to a child only if the
amount that he or she estimates under subsection (1) is not more than 85% of
the total of the parent’s adjusted taxable income for the last relevant year of
income for the child support period. In other words, the election must be for
an amount less than the adjusted taxable income for the last relevant year of income.
Subsection 146G(4)
sets out how an election is made, and provides that the parent makes the
election by giving notice of it to the Registrar in the manner specified by the
Registrar. The notice must specify the amount the parent estimates to be his or
her adjusted taxable income.
Section 146H provides that the Registrar may refuse to accept an
election. Subsection 146H(1)
provides that the Registrar may refuse to accept the parent’s election if the
Registrar is satisfied that the amount the parent estimated under
subsection 146G(1) is likely to be less than the actual amount that would
be the parent’s adjusted taxable income for that 12 month period. A note following subsection 146H(1) states that
if the Registrar refuses to accept the election, he or she may refuse to vary
the provisional notional assessment under subsection 146C(3).
Subsection 146H(2)
provides that in making the decision as to whether to refuse the election, the
Registrar:
(a)
may act on the basis of
information that the Registrar has received or obtained as to the financial
circumstances of the parent; and
(b)
may, but is not required to,
conduct an inquiry into the matter.
Subsection 146H(3)
provides that except for the purposes of Parts VII, VIIA and VIII of the Child
Support Registration and Collection Act (dealing with objections and appeals),
if the Registrar refuses to accept an election, the election is taken never to
have been made.
Section 146J
sets out the effect of an election. Subsection 146J(1) provides that if a
parent makes an election under subsection 146G(1) relating to a child,
then, for the purposes of making the provisional notional assessment, the
parent’s adjusted taxable income is the amount the parent estimated.
Subsection 146J(2)
provides that subsection 146J(1) has effect subject to any order or
determination referred to in paragraph (a) of the definition of income
amount order (see section 59 – that is, an order for a departure
determination or a court-ordered departure from administrative assessment) that
is made after the making of the election that applies in relation to the parent
and the particular day in the child support period in respect of which the
provisional notional assessment is made.
Subsection 146J(3)
provides that the Registrar must take such action as is necessary to give
effect to subsection 146J(1) in relation to the provisional notional
assessment that has been made in relation to the parent and the child (whether
by varying the provisional notional assessment or otherwise).
Section 146K deals with revocation of an election. Subsection 146K(1) provides that before a
provisional notional assessment becomes a notional assessment under
section 146E, a parent who has made an election under subsection 146G(1)
in relation to a child may, by notice given to the Registrar, revoke the
election. Subsection 146K(2) provides that a notice given to the
Registrar must be given in the manner specified by the Registrar. A note
following subsection 146K(2) explains that section 150A provides for
the Registrar to specify the manner in which a notice may be given.
Section 146L
sets out the effect of a revocation. Subsection 146L(1) provides that if
a parent who made an election under section 146G relating to a child
revokes the election and substitutes a new election before the provisional
notional assessment becomes a notional assessment under section 146E, then, for
the purposes of making the provisional notional assessment, the parent’s
adjusted taxable income is the amount the parent elected in the new election.
Subsection 146L(2)
provides that subsection 146L(1) has effect subject to any order or
determination referred to in paragraph (a) of the definition of income
amount order (see section 59 – that is, an order for a departure
determination or a court-ordered departure from administrative assessment) that
is made after the making of the election that applies in relation to the parent
and the particular day in the child support period in respect of which the
provisional notional assessment is made.
Subsection 146L(3)
provides that the Registrar must take such action as is necessary to give
effect to subsection 146L(1) in relation to the provisional notional
assessment that has been made in relation to the parent and the child (whether
by amending the provisional notional assessment or otherwise).
Subsection 146L(4)
provides that section 146L does not prevent:
(a)
the Registrar making a
determination under Part 6A; or
(b)
a court making any order under
Division 4 of Part 7; or
(c)
the making, and acceptance by the
Registrar, of a child support agreement that includes provisions that have
effect, for the purposes of Part 5, as if they were such an order made by
consent.
Child
Support Registration and Collection Act
Item 72 inserts into subsection 80(1) (after table item 14) an item 14A,
which provides that a party to the relevant child support agreement may object
to the particulars of a notional assessment. This ensures that a party may
apply to the SSAT for review of the particulars of a notional assessment.
Part 2 – Application and transitional provisions
Item 73 sets out the
application provisions for this Schedule. Subitem 73(1) provides that
the amendments in this Schedule (other than item 58, which is in
relation to crediting of lump sums) apply in respect of a child support
agreement if the application for acceptance of the agreement is made after
Division 3 of Part 1 of this Schedule commences, that is, after the amendments
relating to notional assessments commence. Subject to subitem 73(3),
the amendments also apply to an application made to a court after this
Division, that is 1 July 2008.
Subitem 73(2) provides that
to avoid doubt, if an application for acceptance of an agreement is made before
the provisions relating to notional assessments commence, and immediately
before that Division commences, the agreement has neither been accepted nor
refused by the Registrar, then the Child Support Assessment Act, the Family
Assistance Administration Act and the Social Security Act as in force before 1
July 2008 apply in relation to the application for acceptance. In other words,
entitlement to FTB will continued to be calculated on the basis of the present
legislative arrangements.
Subitem 74(2) also has
consequences for agreements covered by subitem 73(2).
Subitem 73(3) is also an avoidance of doubt item, and provides
that if:
(a) an application is made to a
court before Division 3 of Part 1 of this Schedule commences; and
(b) immediately before that
Division commences, the application has not been finally dealt with by the
court;
the
Assessment Act and the Registration and Collection Act, as in force at that
time, continue to apply after that time in respect of the application
(including in respect of an appeal to another court in relation to any order
made by the court).
Item 74 requires the
Registrar to review all agreements.
Subitem 74(1) provides that
before 1 July 2008, the Registrar must review every child support agreement
that will be in force immediately before 1 July 2008 and determine in
writing whether each agreement is to be a binding child support agreement or is
to be terminated.
Subitem 74(2) provides
that if, in accordance with subitem 28(2), the Registrar accepts a child
support agreement on or after 1 July 2008 under the
Child Support Assessment Act as in force immediately before that
day, the Registrar must review the agreement and determine whether the
agreement is a binding child support agreement or is to be terminated.
Subitem 74(3) provides that
after the Registrar makes a determination under subitem 74(1) or (2),
the Registrar must serve notice of the determination on each of the parties to
the agreement.
Subitem 74(4) provides that
the notice must include, or be accompanied by, a statement to the effect that
the party may, subject to the Child
Support Registration and Collection Act,
object to the decision. Paragraph 29(3)(b)
provides that if the person is aggrieved by a later decision on an objection,
no matter who lodged the objection, that person may apply to the SSAT. This
ensures that if the other party lodged the objection, and the matter is resolved
to that person’s satisfaction, the person referred to in
paragraph 29(4)(b) does not lose his or her right to apply to the SSAT for
review of the decision.
Subitem 74(5) provides that a contravention of subtitem 29(2),
for example, if the notice does not set out that a person may apply to the SSAT
for review of a decision, does not affect the validity of the decision.
Subitem 74(6) provides that
the Child Support Registration and Collection Act (as amended by
Schedule 3 to this bill, which deals with review of child support decisions by
the SSAT) applies as if the table in subsection 80(1) included table item
16. This ensures that a party to the agreement may apply to the SSAT for
review in relation to a decision of the Registrar that an agreement is to be a
binding child support agreement, or is to be terminated.
Item 75 sets out the effect
of a determination under item 74.
Subitem 75(1)(a)
provides that if the Registrar makes a determination under subparagraph 74(1)(b)(i)
or (2)(b)(i), then at the time specified in subitem 75(3), if
the agreement has not previously been terminated, the agreement is taken to be
a binding child support agreement. Paragraph 75(1)(b) provides
that the amendments made by this Schedule do not affect the continuity of any
assessment that is in force immediately before the new arrangements for
agreements commence that affects the annual rate of child support that is
payable under the agreement.
Subitem 75(2) provides
that if the Registrar makes a determination under subparagraph 74(1)(b)(ii)
or 74(2)(b)(ii), then, at the time specified in subitem 75(3),
(if the agreement has not already been terminated), the agreement is terminated
by force of this item.
Subitem 75(3) provides
that subitems 75(1) and (2) do not affect the operation of
provisions in an agreement that do not have effect for the purposes of the
Child Support Assessment Act or the Child Support Registration and Collection
Act. For example, if a child support agreement also contains provisions which
relate to division of property, those provisions are not affected by the child
support law.
Subitem 75(4) sets out
when determinations take effect for the purposes of subitems 75(1) and
(2). Paragraph 75(4)(a) provides that if the determination is
made under subparagraph 29(1)(b)(i), then it takes effect on 1 July 2008.
Paragraph 75(4)(b) sets out that determinations take effect on the
latest of the following times:
(i)
if the decision of the
Registrar to make the determination becomes final – at the time when that
decision becomes final (subparagraph 75(4)(b)(i)). Subitem 75(5)
provides that a decision of the Registrar becomes final at the end of the time
within which an application could have been made to the SSAT under
section 80 of the Child Support Registration and Collection Act (as it
applies because of subitem 74(2) of this Schedule – that is,
whether the child support law in its present form, or its amended form, applies);
(ii)
if a decision of the
SSAT relating to the Registrar’s determination becomes final—at the time when
that decision becomes final (within the meaning of subsection 110W(1) of the
Child Support Registration and Collection Act) (subparagraph 75(4)(b)(ii);
or
(iii)
if neither
subparagraph (i) nor (ii) applies—at the time when a decision of a court
relating to the Registrar’s determination becomes final (within the meaning of
subsection 110W(2) or (3) of that Act) (subparagraph 75(4)(b)(iii);
(iv)
at the time when the
agreement takes effect.
For example:
An agreement is made on 1 June 2008 to take effect from that date
until 1 December 2009. It is lodged for acceptance with the Registrar on 14
June 2008.
If the Registrar makes a decision on 21 June 2008 to accept the
agreement, then as a result, the Registrar must vary the assessment under the
current provisions, from 1 June 2008 until 30 June 2008, in accordance with the
agreement. The Registrar must also determine whether, from 1 July 2008, the
agreement will be terminated or become a binding child support agreement. If
the agreement becomes a binding child support agreement, the Registrar must
vary the assessment from 1 July 2008 until 1 December 2009.
If the Registrar makes a decision on 7 July 2008 to accept the
agreement, the Registrar must vary the assessment from 1 June 2008 until 30
June 2008, in accordance to the agreement. The Registrar must also determine
whether, from 1 July 2008, the agreement will be terminated or become a binding
child support agreement.
However, if this agreement was to take effect from 1 July 2008,
instead of 1 June 2008, and was still lodged on 14 June 2008, if accepted,
the Registrar would just need to determine whether the agreement would be terminated
from 1 July 2008. That is, in effect the agreement would never commence or it
would become a binding child support agreement when it was implemented from 1
July 2008.
If the agreement was lodged
for acceptance on 2 July 2008, the new law applies and transitional
arrangements are not necessary.
Subitem 75(5) provides that for the purposes of subparagraph 75(4)(b)(i),
a decision of the Registrar becomes final at the end of the period within which
an application could have been made to the SSAT under section 80 of the
Child Support Registration and Collection Act (as it applies because of subitem 74(6)
of this Schedule).
Subitem 75(6) provides
that parties to a child support agreement may terminate that agreement by
another agreement that is in writing and signed by the parties to the original
agreement, as well as by making a binding termination agreement under
section 80D.
Item 76 gives to the
Registrar the power to delegate, in writing, all or any of his or her powers
under item 74 to an SES officer, or acting SES officer, of the
Department. A delegate, in exercising the Registrar’s power, must comply with
any directions of the Registrar. This delegation power reflects the way that
delegations are currently arranged in the Child Support Agency.
Item 77 sets out the
application provisions in relation to crediting of lump sum payments. It provides that the amendments apply to
lump sum payments that are paid by a payer in accordance with lump sum payment
provisions in an agreement under paragraph 84(1)(e) of the Child Support
Assessment Act or a court order made under section 123A of that Act (as
amended or inserted by this Schedule), and after the commencement of Division 2
of Part 1, that is, the provisions dealing with lump sums, of this Schedule.
Part 3 – Consequential amendments
Family Assistance Administration Act
The
items in this Part all make consequential amendments to remove various
references to subsection 91A(3) of the Child Support Assessment Act, because of
the repeal of section 91A by Part 1 of this Schedule.
Items
78 to 89 amend the Family Assistance
Administration Act for this purpose.
Item
78 amends subsection 104(1).
Item
79 repeals subsection 104(2).
Item
80 repeals and substitutes subsection
106(3).
Item
81 repeals and substitutes
subsection 108(1).
Item
82 repeals section 109.
Item
83 repeals and substitutes
subsection 109B(3).
Item
84 repeals subsection 111(1B).
Item
85 repeals subsection 118(2A).
Item
86 repeals subsection 122(4).
Item
87 repeals and substitutes paragraph
139(1)(a).
Item
88 repeals paragraph 139(5)(aa).
Item
89 repeals subsection 142(5).
Social Security Act
Item
90 amends the Social Security Act
for the same purpose, by omitting words from the definition of officer
in subsection 23(1).
Schedule 6 – Amendments relating to departure orders
(commencing on 1 July 2008)
Summary
This Schedule simplifies the processes and rules for
determinations or orders made under the Child Support Assessment Act to depart
from the administrative assessment provisions (also known as ‘changes of
assessment’), making them clearer for parents.
Background
Despite
the changes made to the formula for assessing child support, there may still be
circumstances, particularly where parents reside some geographical distance
apart, when the formula allowance for costs enabling contact with a child may
be inadequate. The costs of travel for the children to and from their
non-resident parent’s home, or for the parent to travel to see the child, may
be significant. When this cost is borne entirely by the non-resident parent,
it can represent a large amount of the child support income of that parent.
This justifies an increased allowance beyond the allowance made in the formula
for regular care.
The
present changes, therefore, amend section 117 to provide that where the costs involved in the parent having
contact with the child have already been included in the child support
assessment, for example, the payer has a lower rate of payment because he or
she has a significant amount of contact with the child, the costs of enabling
contact are limited to travel costs only. This means that regardless of
whether the parent’s contact costs, such as the cost of providing accommodation
for the child, have been taken into account in assessing the parent’s
liability, the Registrar should still be able to consider travel costs required
for the parent to have contact with the child, in deciding whether there should
be a departure from the assessment. The amendments also provide that this
ground is available where the contact has not yet occurred, that is, it applies
in relation to future costs, as well as costs already incurred.
There
are also many families which include children who are not biologically related
to the parent of the child support children. Children not living with both
biological or adoptive parents should receive support from their absent
parent. Yet not all non-resident parents are in a position to contribute to
the support of their child. For example, the non-resident parent may be
deceased, unknown or not locatable. In such situations, the step-parent (also
called a resident parent) is actually supporting the child. However, the child
support scheme does not adequately recognise the responsibility that a
step-parent has towards resident children. A court will rarely declare that a
step-parent has a responsibility to support a step-child where the step-child
is living with the step-parent against whom the order is sought.
Consequently,
the present changes amend section 117 to require a court to consider a
step-parent’s responsibilities towards step-children. This involves the court
considering the position and capacity of the child support parent of the
step-child (generally, the step-child’s biological parent), along with the
impact of any change on the child support children and the payee. This ground
can only be established where neither of the biological parents is in a
position to support the child. The fact that the non-resident parent is unable
to pay child support is not, in itself, sufficient. The parent with whom the
step‑parent lives must also be unable to earn an income to provide for
the child’s support.
Explanation of the changes
Part 1 - Amendments
Child Support Assessment Act
Item 1 omits from subsection
98C(3) ‘subsections 117(4)’ and substitutes ‘subsections 117(2A) and (4)’. Item
2 omits from subsection 98L(2) ‘subsections 117(4)’ and substitutes
‘subsections 117(2A) and (4)’. Item 4 omits from subsection 98U(3)
‘subsections 117(4)’ and substitutes ‘subsections 117(2A) and (4)’. These
changes are required because of the insertion of new subsection 117(2A).
Item 3 repeals subsection
98S(3A). This change is required because subsection 98S(3A) refers to
subparagraphs 117(2)(c)(iii) and (iv), which are being repealed (see item 9).
Item 4 omits from
subsection 98U(3) ‘subsections 117(4)’ and substitutes
‘subsections 117(2A) and (4)’.
Item
5 inserts after paragraph 117(2)(a)
a further paragraph 117(2)(aa). It provides that, in the special
circumstances of the case, the capacity of either parent to provide financial
support for the child is significantly reduced because of the responsibility of
the parent to maintain another child (the resident child) of the parent.
Item 6 omits from
subparagraph 117(2)(c)(ii) ‘child; or’ and substitutes ‘child.’. This change
is required because subparagraphs 117(2)(c)(iii) and (iv) are being repealed
(see item 7).
Item 7 repeals subparagraphs
117(2)(c)(iii) and (iv). This is because the matters dealt with in these
subparagraphs, that is, additional amounts of income earned derived or received
by the liable parent or eligible carer for the benefit of the resident child,
will be dealt with by new subsection 117(2A) (see item 11).
Item 8 repeals the note
following subsection 117(2), which states that section 117A deals with
income earned for the benefit of resident children.
Item 9 repeals subsection
117(3) and subsections 117(2A) and (2B). Subsection 117(2A) provides that the
ground for departure mentioned in paragraph 117(2)(aa) (see item 5) is
taken not to exist in respect of a child unless the matters set out in
subsection 117(2A) are satisfied. These factors are that:
(a)
the resident child normally lives
with the parent but is not a child of the parent;
(b)
the parent is, or was, for two
continuous years, a member of a couple;
(c)
the other member of the couple
is, or was, a parent of the resident child;
(d)
the resident child is aged under
18;
(e)
the resident child is not a
member of a couple;
(f)
neither the parent of the
resident child is able to support the resident child due to death, ill-health,
or the responsibility of the parent to care for another child; and
(g)
the court is satisfied that the
resident child requires financial assistance.
Subsection 117(2B)
provides that a parent’s costs of enabling the parent to have care for the
child can only be high for the purposes of making out the ground of departure
that there are special circumstances relating to:
·
the parent’s high costs involved
in enabling a parent to have contact with any other child or another person
that the parent has a duty to maintain , or
·
the high costs involved in
enabling a parent to have contact with the child,
if
the costs that have been or will be incurred are no more than 5% of the amount
worked out by the formula included in the subsection. The inclusion of the
words ‘or will be incurred’ mean that future costs can also be taken into
account.
Subsection 117(2C)
provides that if a parent has at least regular care of a child, then the only
costs that can be taken into account for the purposes of
subsection 117(2B) are costs related to travel to enable the parent to
care for the child.
Item 10 repeals section
117A. This change is required because consideration of the cost of maintaining
a resident child is now dealt with by subsection 117(2A) (see item 9).
Item 11 repeals subsection
118(2A). This change is required because subsection 118(2A) refers to
subparagraphs 117(2)(c)(iii) and (iv), which are being repealed (see item 7).
Part 2 – Application provision
Item
12 sets out the application of the
items in Schedule 5. It provides that the amendments apply in respect of:
(a)
applications made under section
98B after this item commences;
(b)
determinations in respect of
which the parties were notified under section 98M after item 16 commences (that
is, after 1 July 2008). In other words, if a person is notified under section
98M before 1 July 2008, then the current procedure – that the Registrar
may make a determination for an almost unlimited past period – applies;
(c)
an application made under
section 116 after this item commences (that is, after 1 July 2008), even
if the application relates to a decision made before that date to make or
refuse to make a determination under Part 6A, or to make an administrative
assessment under subsection 66(1).
Schedule 7 – Other amendments commencing on 1 July
2008
Summary
This
Schedule provides for other reforms that are to commence on
1 July 2008. These amendments change the way that the Registrar
considers a payee’s application to opt for collection of child support by the
Registrar. This will make the process easier for the payee to opt for
collection by the Registrar. Other amendments allow the Registrar to request
the Repatriation Commission to make deductions from certain veterans’
entitlements in order to pay child support debts.
Background
RECONCILIATIONS
BETWEEN PARENTS
Currently, if parents reconcile, the payer continues
to be liable under an existing administrative assessment until the payee
advises the Registrar that he or she wishes the administrative assessment to
end. If the parents separate again, having previously ended the administrative
assessment, they must apply for a new administrative assessment. If the
parents are trying to reconcile, the requirement to end the administrative
assessment, and then to make a new application if the reconciliation is not
successful, may be another stress on their relationship. To deal with this, a
new section 150E is being inserted. It allows parents to reconcile for
period of up to six months without the administrative assessment being
terminated. During such periods of reconciliation, the administrative
assessment is suspended. This means that debt does not continue to accrue
against the payer during these periods. If the couple separates within six months
of the suspension determination in relation to the reconciliation taking
effect, the administrative assessment again comes into effect. However, if the
reconciliation lasts for longer than six months, the administrative
assessment is terminated.
PAYEE’S APPLICATION TO
OPT FOR COLLECTION OF CHILD SUPPORT BY THE REGISTRAR
Payee
parents presently have limited rights to make a choice as to whether to use the
Registrar to collect child support. When the liability commences, payee
parents can ask the Registrar to collect on their behalf. However, the
Registrar can require parents to collect child support privately, despite
parents not having made an election to do so, if the Registrar is satisfied
that the parents involved can make their own sustainable private collection
arrangements. Section 39 of the Child Support Registration and Collection Act
deals with applications for liabilities which the payee has been collecting
privately to become again enforceable under the Act. This might occur if the payer
and payee are finding a private collection arrangement difficult to sustain.
Presently, subsection 39(5) provides that the Registrar must grant the
application if the payer is taken to have an unsatisfactory payment record, or
if the Registrar is satisfied that special circumstances exist in relation to
the liability which make it appropriate to grant the application. However,
this situation does not adequately balance the interests of the payer and the
payee. Accordingly, subsection 39(5) is amended to reverse the onus, in order
to make it easier for the payee to opt for collection of child support amounts
by the Registrar.
NON-AGENCY PAYMENTS
This
Schedule also includes refinements of the ‘non-Agency payment’ provisions of
the Child Support Registration and Collection to improve the flexibility of
those provisions for the way parents manage their child support payments and to
align the provisions with the Taskforce recommendations.
DEDUCTIONS FROM OTHER
PAYMENTS
It
is important for the effectiveness of the child support scheme that
administrative assessments are backed up by appropriate enforcement mechanisms
if a payer will not pay voluntarily. Presently, some of a payer’s sources of
income, such as social security payments, can be intercepted in order to pay a
child support liability. However, many types of government payments, including
various veterans’ affairs payments, cannot be intercepted. While excluding
these payments from deduction recognises matters such as service to the
Australian community, a parent’s obligations to his or her children should not
be treated as reduced because of this service. Usually, veterans comply
voluntarily with the child support obligations. However, there have been
occasions where they have not complied. Consequently, the present changes
allow deductions to be made from various veterans’ affairs payments.
Explanation of the changes
Part 1 – Amendments
Child Support Assessment Act
Item 1 adds to section 12 of the Child Support Assessment Act, relating to a
child support terminating event, a new element for the purposes of
reconciliation between parents (see mainly item 2).
Item 2 inserts before section 150 a new
section 150E. Section 150E deals with suspension of liability to pay child support where parents
reconcile. Subsection 150E(1) provides that the Registrar must make a
determination (a suspension determination) that child support is not payable
for a child by a liable parent to the other parent of the child if:
(a)
the Registrar is notified, or
otherwise becomes aware, that the parents have become members of the same
couple; and
(b)
the Registrar is satisfied that
the parents have become members of the same couple.
The
Registrar must otherwise become aware that the payer and payee are again
members of the same couple, for example, through information supplied by
Centrelink. It is intended that the expression ‘members of the same couple’
has the same meaning as the expression members of a couple in
section 5. That is, the members of the couple are legally married to each
other and are not living separately or apart on a permanent or indefinite
basis, or the couple are members of the opposite sex and are living together on
a genuine domestic basis although not legally married to each other.
Subsection 150E(2)
provides that if the Registrar makes a suspension determination, child support
for the child is not payable by the liable parent to the other parent:
(a)
from the date the Registrar
determines that the parents became members of the same couple; and
(b)
until the Registrar makes a
determination under subsection 150E(3) in relation to the parents.
A
note following subsection 150E(2) states that uIfnder section
12, there is a child support terminating event if the parents are
members of the same couple for a period of six months or more, there is a
child support terminating event under section 12.
Subsection 150E(3)
provides that if, within six months of the suspension determination taking
effect, the Register is satisfied that the parents have ceased being members of
the same couple, the Registrar must make a determination under this subsection
that child support is again payable by the liable parent to the other parent.
Subsection 150E(4)
provides that if the Registrar makes a determination under
subsection 150E(3), child support is again payable by the liable parent to
the other parent from the date that the Registrar is satisfied that the parents
ceased to be members of the same couple.
Subsection 150E(5)
provides that to avoid doubt, child support is still payable by a liable parent
for a child to a non‑parent carer of the child despite a suspension
determination being made in respect of the parents of the child.
A
decision by the Registrar to suspend an administrative assessment, or to
determine that child support is again payable, are reviewable decisions.
Section 37A of the Child Support Registration and Collection Act provides
that the Registrar must vary the Child Support Registrar on amendment of a
child support assessment. Section 42C (a new section which is being
introduced in Schedule 3 to this bill) provides that notices must be given to
payers and payees in relation to registration decisions. Section 80 (which
is set out in Schedule 3 to this bill) sets out decisions against which
objections may be lodged. Table item 3, in subsection 80(1), provides
that the payer or payee of a registrable maintenance liability may object to a
decision of the Registrar about the particulars varied in the Child Support
Register.
Child Support Registration and Collection Act
Item 3 repeals and
substitutes subsection 39(5). New subsection 39(5) provides that the Registrar
must grant the application unless the Registrar is satisfied that:
(a)
the payer of the liability has
been complying with his or her child support obligations, or
(b)
the payer of the liability has
satisfactorily explained and rectified a failure to comply with his or her
child support obligations in relation to a payee; or
(c)
there are special circumstances
that exist in relation to the liability that make it appropriate to refuse the
application.
New
subsection 39(5) therefore reverses the onus in relation to an application for
collection by the Registrar, so that a payee’s application to have a child
support liability collected by the Registrar will granted unless the payer can
demonstrate that it should not be granted for one of the reasons set out in
subsection 39(5). Payees are in the best position to know whether, given the
context of their overall relationship with the payer, collection by the Child
Support Agency, would be the better option for them. This change attempts to
balance better the needs of the payee, the payer and the Child Support Agency
in relation a payee’s decision to opt for collection by the Child Support
Agency.
Item
4 amends section 71A by
inserting ‘(1)’ before ‘Subject’.
Item
5 amends section 71A by
inserting ‘and in accordance with subsections (2) and (3)’ after ‘30’.
Item
6 adds at the end of
section 71A further subsections 71A(2) and (3).
Subsection 71A(2) provides that, if:
(a)
the application referred to in
paragraph (1)(b) specifies that the amount, or part of the amount,
received by the third party is to be credited against the liability in relation
to a specified percentage that is less than 100% of the amount payable under
the liability; and
(b)
the Registrar is satisfied that
the payer and the payee agree that the amount is to be credited against the
liability in relation to that percentage of the amount, or the part of the
amount, payable under the liability;
then
the Registrar must credit the amount against the liability in relation to that
percentage of the amount, or the part of the amount, payable under the
liability.
Subsection 71A(3)
provides that otherwise, the Registrar must credit the amount against the
liability in relation to 100% of the amount, or the part of the amount, payable
under the liability.
This
change is being made to clarify that non-agency payments can be credited
against less than 100% of the liability. It ensures that parents are able to
use this flexibility in the way that they manage their child support payments.
Item
7 repeals subsections 71C(1)
and (2), and substitutes subsection 71C(1). This is done in order to
improve the clarity and comprehensibility of how crediting of prescribed
non-agency payments occurs. Subsection 71C(1) provides, if:
(a)
the payer of an enforceable maintenance
liability in relation to a payment period or initial period has made one or
more payments to the payee of the liability, or to another person; and
(b)
the payment is a payment of the
kind specified in the regulations (see Regulation 5D of the Child Support
(Registration and Collection) Regulations 1988 for a list of the payments);
and
(c)
the sum of those payments exceeds
the sum all such payments previously credited under this section against the
liability for all past periods; and
(d)
the payer does not have at least
regular care of any of the children to whom the relevant administrative
assessment relates;
then
the Registrar must, despite section 30, credit the excess amount mentioned
in paragraph (c), up to a maximum amount that is equal to 30% of the
amount payable under the payer’s liability for the period, against the
liability in relation to the amount payable under the liability for the period.
A
note following subsection 71C(1) explains that subsection 71C(1) is
subject to section 71D.
Item 8 inserts after section
72B a new section 72AC. Section 72AC allows the Registrar to request the
Repatriation Commission to make deductions from certain payments which the
Repatriation Commission administers in order to pay child support debts. Subsection
72AC(1) states that the Registrar may do this if a person is a payer of an
enforceable maintenance liability, or the person owes a child support debt, and
a portion of that debt remains unpaid after the day on which the debt became
due and payable under section 66 of the Child Support Registration and
Collection Act, and the person is receiving one of a number of payments under
the Veterans’ Entitlement Act 1986. These payments are:
(i)
an age service pension under
Division 3 of Part III of that Act;
(ii)
an invalidity service pension
under Division 4 of Part III of that Act;
(iii)
a partner service pension under
Division 5 of Part III of that Act;
(iv)
income support supplement under
Part IIIA of that Act; or
(v)
Defence Force Income Support
Allowance under Division 2 of Part VIIAB of that Act.
Subsection
72AC(2) sets out the requirements of the notice which the Registrar must send
to the Repatriation Commission.
Veterans’ Entitlement Act 1986
Item 9 inserts at end of
section 58J new subsection 58J(3). It provides that the Commission must, in
accordance with a notice given under section 72AC of the Child Support
Registration and Collection Act (see item 2) make deductions from
instalments of the pension payable to the recipient and pay the amounts
deducted to the Registrar.
Item 10 inserts after section
122D a new section 122E, which deals with deductions of Defence Force Income
Support Allowance (DFISA) paid to the Registrar. It provides that the
Commission must, in accordance with a notice given under section 72AC of
the Child Support Registration and Collection Act (see item 2), make
deductions from instalments of DFISA and pay the amount deducted to the
Registrar.
Part 2 – Application provisions
Item
11 sets out the application
arrangements for the provisions dealing with reconciliations between parents.
It provides that this Schedule applies in relation to parents who become
members of the same couple after the commencement of this Schedule.
Item
12 sets out the application of item
2. That is, it sets out the application of section 150E, which deals
with the effect on administrative assessments of reconciliations between the
parents. It provides that item 2 applies in relation to parents that
the Registrar is notified have become members of the same couple, and the
Registrar is satisfied have become members of the same couple, after the
commencement of this Part (that is, 1 July 2008).
Item 13 sets out that that
amendments made by item 3 of this Schedule, that is, changing the onus
in applications for variation to enable liability to become again enforceable
under the Child Support Registration and Collection Act, apply in relation to
applications made under section 39 after the commencement of this Schedule.
Item
14 sets out the application
arrangements in relation to crediting of non‑agency payments for less
than 100% of the amount payable. It provides that the amendments apply in
relation to amounts that are received, after the commencement of this Schedule,
by a third party (as mentioned in subsection 71A(2) of the Child Support
Registration and Collection Act as inserted by this Schedule) (see item 6).
Item
15 sets out the application
arrangements in relation to the amendment made to crediting of prescribed
non-agency payments. Subitem 15A(1) provides that the amendment
made by item 7 of this Schedule applies in relation to payments,
made after the commencement of this Schedule, of the kind referred to in
subsection 71C(1) of the Child Support Registration and Collection Act (as
inserted by this Schedule). Subitem 15(2) provides that to avoid
doubt, the amendment does not apply to payments made before the commencement of
this Schedule which have not, at the time of commencement, been credited under
section 71C of that Act.
Schedule 8 – Amendments relating to family tax benefit
(commencing on 1 July 2008)
Summary
Amendments
are made to ensure that a child in respect of whom an individual has less than
35% care cannot be an FTB child of that individual for the purposes of
attracting payment of child specific components of family tax benefit (FTB).
However, individuals who have at least 14% but less than 35% care of a child (a
regular care child) would continue to have access to FTB Part A in the form of
income tested rent assistance and a regular care child will continue to attract
a health care card under the social security law. Child care benefit (CCB)
will also continue to be available in relation to care provided to a regular
care child by an approved child care service or registered carer. These
changes are consistent with recommendations 1.14 and 1.15 of the Taskforce
Report.
The
provisions of the maintenance income test (MIT), relevant in working out an
individual’s FTB Part A rate, are amended to ensure that the MIT applies only
to the children in a family for whom child support is payable. This change is
consistent with recommendation 9.1 of the Taskforce Report.
PART 1 –
REGULAR CARE CHILDREN
Background
Section
22 of the Family Assistance Act defines the concept of an FTB child.
Subsection 22(7) deals with the situation where there is a pattern of care in
relation to a child such that the child was, or will be, an FTB child of two or
more individuals, for example, where separated parents with joint legal
responsibility are sharing actual care of the child. In these circumstances,
the child is deemed to be an FTB child of all relevant individuals for the
period of the pattern of care. A pattern of care is determined by looking at
the current care arrangements for the relevant child or children. This will
generally be based on arrangements set out in a court order or parenting plan
or as agreed by the parents concerned. Where care arrangements are disputed, the
available evidence (such as the caring arrangements for the child across a
financial year) is considered in determining whether there is a pattern of care
and the shared care arrangements.
Section
25 of the Family Assistance Act currently deals with the situation where an
individual has the care of a child for less than 30% of the time. There are
two basic rules here. The first is that a child who is in the care of an
individual for less than 10% of the time cannot be that individual’s FTB
child. The second is that an individual who has at least 10% but less than 30%
care of a child can waive eligibility for FTB in respect of the child for some
or all days in the period of the pattern of care. Where this happens, the
child is not an FTB child of the individual for the days covered by the waiver.
The capacity
to determine a percentage of FTB applicable to each individual involved in a
shared care arrangement is set out in section 59 of the Family Assistance Act.
This determination then links into various elements of the FTB rate calculation
process in Schedule 1 to the Family Assistance Act. For example, clause 11 of
Schedule 1 ensures that a percentage determination is relevant in determining
the FTB child rate for a particular child in working out the individual’s
standard rate of FTB Part A under method 1.
A percentage determination is also relevant in determining an
individual’s amount of maternity immunisation allowance under section 68 of the
Family Assistance Act.
Consistent
with recommendation 1.14 of the Taskforce Report, the existing rules relating
to shared care described above are amended to ensure that FTB Parts A
and B will no longer be split where an individual is providing care for a
child for less than 35% of the time. Where an individual has care for 35% or
more of the time, then a new methodology would generally apply to determine how
FTB should be split. This methodology is set out in the table in new
section 59 of the Family Assistance Act.
Under recommendation 1.14, a child in respect of whom an individual has
at least 14% but less than 35% care will not be an FTB child of the
individual. The effect under the current law is that the individual will not
be eligible for FTB in respect of that child. However, recommendation 1.15
supports continued eligibility for rent assistance for individuals who have
this level of care of a child and are not otherwise entitled to payment of FTB
(because they do not have another child who is an FTB child). Consistent with
recommendation 1.15, a new subcategory of FTB is introduced for
individuals who do not have an FTB child but have a regular care child (a child
in respect of whom the individual has at least 14% but less than 35% care) who
is also a rent assistance child (for example, is aged under 16). The
rate of this new subcategory of FTB payment would be the amount of rent
assistance for which the individual is eligible (based on existing rules) minus
any reduction for adjusted taxable income (based on the existing FTB Part A income
test). The rate of the new subcategory of FTB would essentially be the rate of
FTB Part A determined using method 1 but without regard to child specific
rates (that is, the standard rate, large family supplement, multiple birth
allowance or the FTB Part A supplement).
Where the individual has one or more FTB children and one or more regular
care children who are rent assistance children, the individual would be
eligible for both rent assistance and child specific FTB payments in respect of
the FTB child or children while the regular care rent assistance children would
only be relevant for the purposes of determining the individual’s rate of rent
assistance.
Neither
the existing nor the new subcategory of FTB would be available to individuals
with less than 14% care of a child. This is currently the position in relation
to individuals with less than 10% care of a child under existing rules in the
Family Assistance Act.
These changes to the concept of FTB child also have
implications for eligibility for CCB, which is linked to having an FTB child.
The policy is that an individual should be eligible for CCB for care provided
by an approved child care service or a registered carer for a child who is an
FTB child of the individual or the individual’s partner (current rule) or would
be an FTB child but for the fact that the individual or partner has at least
14% but less than 35% care of the child (that is, the child is a regular care
child of the individual or the individual’s partner). Amendments are made to
ensure that a regular care child can attract CCB in the same way as an FTB
child. This is consistent with the approach taken in preserving certain
entitlements and concessions for individuals with a regular care child under
recommendation 1.15.
Recommendation 1.15 also supports continued access to a
health care card for individuals with a regular care child. Amendments are
made to the health care card provisions in the Social Security Act to this
effect.
Explanation of the changes
Division 1 – Amendments
Family Assistance Act
Section 3 of the Family Assistance Act contains definitions of terms and
concepts used in the family assistance law.
New definitions of absent overseas recipient, absent overseas
regular care child, parenting plan, regular care child and shared
care percentage are inserted into subsection 3(1) by items 1, 2, 6, 8
and 11. These new terms are further explained in the context in which they
first appear.
The definition of relevant shared carer is modified by item 9
to reflect changes made to the way in which shared care percentages are
determined and the new concept of shared care percentage.
Consequential amendments are also made to some definitions as a result
of:
·
the insertion of new terms (for example, the definition of FTB
child is amended by items 3 to 5 inclusive as a consequence of the
introduction of the new concept of regular care child); and
·
the relocation of provisions (the amendments made by items 7
and 10 are relevant here).
Section
6 of the Family Assistance Act sets out the immunisation requirements that are
relevant for the purposes of determining eligibility for CCB and maternity
immunisation allowance.
Item
12 inserts a reference to regular
care child in paragraph 6(4)(a). The effect is that a regular care child
of an individual can meet the immunisation requirements if the individual has a
conscientious objection to the child being immunised and a recognised
immunisation provider has certified in writing that there has been a discussion
with the individual about the benefits and risks of immunisation (in the same
way as an FTB child).
Section
21 of the Family Assistance Act sets out the eligibility requirements for FTB
for an individual. Subsection 21(1) is modified by item 13 so that an
individual can be eligible for FTB if the individual is not an absent overseas
recipient and has at least one regular care child who is also a rent assistance
child.
An
absent overseas recipient is an individual who has been absent from
Australia for longer than 13 weeks (see definition of absent overseas
recipient in subsection 3(1), as inserted by item 1 and also section
62 of the Family Assistance Act).
A
regular care child is defined in subsection 3(1) (as inserted by item
8). A regular care child is a child who would be an FTB child of an
individual but for the fact the individual has less than 35% care of the child,
and the individual has at least 14% care of the child. (For CCB, a regular
care child is also a child determined by the Secretary under specified
provisions as a regular care child.)
A
rent assistance child is defined in subsection 3(1) by reference to new clause
38B of Schedule 1 to the Family Assistance Act. New clause 38B incorporates
the existing definition of rent assistance child in respect of an FTB
child (currently in clause 12 of Schedule 1 to the Family Assistance Act) and
inserts a new comparable definition in respect of a regular care child. The
requirements for a regular care child are described in a different way because
the base FTB child rate is not relevant for regular care children who cannot
attract an FTB child rate.
Section
22 of the Family Assistance Act sets out circumstances in which an individual
can be an FTB child of another individual (adult).
Item
14 inserts a reference to a parenting
plan into paragraph 22(3)(b). This is a technical amendment that
recognises parenting plans as a mechanism that defines the relationship between
separated individuals and a child and is therefore relevant in determining
whether a child is an FTB child of an individual. A parenting plan has
the meaning given by the Family Law Act (see definition in subsection
3(1) of the Family Assistance Act as inserted by item 6).
Item
15 inserts a series of new
provisions into section 22 of the Family Assistance Act which deal with shared
care.
New subsection 22(6A) applies where there is a
pattern of care for a child over a period such that the child is an FTB child
of more than one individual for the whole or parts of that period, one of the
individuals claims FTB in respect of the child and that individual is not a
partner of at least one of the other individuals involved in the pattern of
care. Where these conditions are met, the Secretary must determine the
percentage of the period that the child was, or will be, in the care of the
claimant. This determination of care under new subsection 22(6A) then informs
the shared care percentage made under section 59 (as amended). A note at the
end of new subsection 22(6A) makes this connection clear.
New
subsection 22(6B) contains some rounding rules that apply when the Secretary
determines a percentage under new subsection 22(6A). If the percentage of care
before rounding is less than 50%, then it is rounded down to the nearest whole
percentage. If the percentage of care before rounding is more than 50%, then
it is rounded up to the nearest whole percentage. These rules ensure that the
total of the percentages in relation to a particular child among the separate
carers does not exceed 100%.
New
subsections 22(6C) and (6D) pick up the rules in existing
subsections 25(2) and (3). These rules ensure that a child cannot be in
the care of more than one individual on a particular day and it is up to the
Secretary to determine which individual has the care of a child on a given day,
having regard to the living arrangements of the child. These considerations
are relevant in determining a percentage of care for an individual under new
subsection 22(6A).
Item
16 repeals and substitutes a new
subsection 22(7), which applies where the Secretary determines, under new
subsection 22(6A), that an individual has at least 35% care of a child.
Where this happens, the child is taken to be an FTB of the individual concerned
for each day in the period of the pattern of care, irrespective of whether or
not the individual has care on that day. This ensures continuity of
eligibility, although the individual’s rate is affected by the percentage of
care determination made under new subsection 22(6A).
A
note at the end of new subsection 22(7) completes the picture by referring the
reader to new section 25 which ensures that a child in respect of whom an
individual has less than 35% care cannot be an FTB child of that individual.
Under
section 23 of the Family Assistance Act, a child continues to be an FTB child
of an individual if the child ceases to be in the individual’s care without
consent and the individual takes reasonable steps to regain the care of the
child. The effect of section 23 is that the individual can continue to receive
FTB in respect of the child for up to 14 weeks after care ceases.
Items 17 to 19 make a number of amendments to section 23 to ensure that the provision
applies in relation to a regular care child in the same way as it does for an
FTB child. The effect is that a child can continue to be a regular care child
of an individual for up to 14 weeks after care ceases in the circumstances
prescribed and the individual can continue to be entitled to FTB Part A on that
basis.
Consistent
with the amendment made to subsection 22(3) of the Family Assistance Act, item
20 makes a technical amendment to subsection 23(5) to insert a reference to
parenting plan in the definition of qualifying period.
Under
section 24 of the Family Assistance Act, a child who is absent from Australia
for longer than three years cannot be an FTB child. Amendments are made to
this provision by items 21 to 23 inclusive to take account of the
possibility that a child can be an FTB child or a regular care child when
leaving Australia or, in relation to a child born overseas, at birth, and
ensure that a child cannot be an FTB child or a regular care child after having
been overseas for longer than three years.
Section
25 currently sets out a number of rules that apply where an individual has less
than 30% care of an FTB child. This provision is repealed by item 24.
In its place is a new section 25, which provides that a child who is in the
care of an individual for less than 35% of the time, as determined under new
subsection 22(6A), cannot be an FTB child of the individual, despite section
22.
Section
26 of the Family Assistance Act ensures that only one member of the same couple
can be eligible for FTB in respect of an FTB child or children of the couple.
Subsection 26(1) is amended by item 25 to ensure that this rule also
applies in respect of a regular care child or children.
Section
27 of the Family Assistance Act ensures that an FTB child of one member of a
couple will also be an FTB child of the other member. This allows a
determination of FTB for an individual to be based on all the children in the
household, including a step-child of the individual. Section 27 is recast by item
26 so that it applies in relation to a regular care child in the same way
as it currently applies in relation to an FTB child. In addition, the new
provision ensures that where a percentage of care determination has been made
under new subsection 22(6A) in relation to an individual in respect of care
provided to a particular child, that the determination also applies in relation
to the individual’s partner in respect of the same child in a blended family
situation.
Sections
28 and 29 allow for the splitting of FTB in certain blended family situations
or in respect of the period before a couple separates. The capacity to
determine a percentage of FTB for each relevant individual is to be found in
sections 60 and 61 respectively. There are other provisions in Schedule 1
to the Family Assistance Act which cross reference these splitting rules and
outline their implications. These rules do not change.
Sections 31 and 32 of the Family Assistance Act provide for
continued eligibility for FTB where an FTB child dies. Eligibility for FTB
will generally continue for 14 weeks after the death of the child, although
there is capacity to pay out that eligibility as a lump sum payment in certain circumstances.
Items
27 to 30 inclusive
ensure that if an individual is eligible for FTB in respect of a regular care
child and that child dies, then the bereavement rules in sections 31 and 32
also apply to extend the individual’s eligibility in respect of the deceased
regular care child in the same way as for a deceased FTB child.
Section 33 deals with the situation where an individual who
is eligible for FTB dies before receiving their entitlement and enables the
Secretary to pay another individual that entitlement. The amendments made by items 31 and 32 ensure that these same rules would apply where there is an
unpaid amount of FTB in respect of a regular care child through the insertion
of references to a regular care child where appropriate.
The
eligibility conditions for maternity payment are set out in sections 36 and 37
of the Family Assistance Act. A common requirement in the scenarios covered by
these eligibility conditions is that the individual claiming maternity payment
in respect of a particular child is eligible for FTB for the child or would be
so eligible except that the individual’s rate is nil. There is no specific
mention of FTB child in these provisions so they could potentially apply where
an individual is eligible for FTB in respect of a regular care child. The
policy is that only FTB children should attract payment of maternity payment.
This is consistent with the general rule for maternity payment that only one
individual is eligible for maternity payment. A provision exists to apportion
maternity payment between two or more individuals, but this provision is
generally intended for a change of care rather than shared care. The latter
would be rare in the case of a new born child.
Items
33 to 40 amend each of the eligibility
categories in section 36 to ensure that an individual can only be eligible for
maternity payment in respect of an FTB child (and not a regular care child).
The
eligibility conditions for maternity immunisation allowance are set out in
section 39 of the Family Assistance Act. Like maternity payment, a common
eligibility requirement for the various categories of maternity immunisation
allowance is the requirement to be eligible for FTB in respect of the child,
without mention of an FTB child. Items 41 to 43 amend the eligibility
conditions for maternity immunisation allowance to ensure that an individual
can only be eligible for maternity immunisation allowance in respect of an FTB
child (and not a regular care child).
Eligibility
for child care benefit is linked, in part, to having an FTB child. The
relevant CCB eligibility rules are set out in sections 42, 44 and 45 of the
Family Assistance Act.
In broad terms, these provisions are amended so that
an individual can be eligible for CCB for care provided by an approved child
care service or registered carer to a regular care child (that is, a child in
respect of whom the individual or individual’s partner has at least 14% but
less than 35% care where the child meets all other requirements for an FTB
child). The relevant amendments are made by items 44, 45, 47, 49 and 50.
Under
existing rules, the Secretary has a capacity under subsections 42(2), 44(3) and
45(3) of the Family Assistance Act, to determine that a child who is not an FTB
child is taken to be an FTB child for the purposes of the relevant provision.
The definition of FTB child in subsection 3(1) of the Family Assistance
Act then includes such a child within the definition of FTB child as it
applies for CCB purposes.
Amendments
are made to these provisions by items 46, 48 and 51. The amendments
enable the Secretary to determine a child who is neither an FTB child nor
regular care child to be a regular care child for the purposes of the relevant
eligibility provision. There is no substantive difference between the benefits
available under CCB in respect of care provided to an FTB child and a regular care
child. The new definition of regular care child in subsection 3(1)
of the Family Assistance Act includes such a child within its definition and a
consequential amendment is made to the definition of FTB child.
Also
of relevance here is the savings provision inserted by item 146. This
provision deems a determination that a child is an FTB child that is in force
under subsection 42(2), 44(3) or 45(3) of the Family Assistance Act immediately
before 1 July 2008 to be a determination that the child is a regular care
child. This savings provision ensures continuity of treatment. It also means
that the Secretary will not need to remake these determinations under the
provisions as amended.
Section
54 of the Family Assistance Act describes the circumstances in which a limit of
50 hours for sessions of care provided by an approved child care service
applies in a week of eligibility. In broad terms, this limit applies where,
among other things, the FTB child of the individual or individual’s partner
attracts payment of carer allowance or where the individual or partner with an
FTB child are themselves disabled. Items 52, 53 and 54 amend section 54
to ensure that the 50 hours limit also applies where an individual or partner
with a regular care child satisfy the stated conditions.
Item
55 repeals existing section 59 and
substitutes a new section 59 under which an individual’s shared care percentage
for an FTB child is determined.
Under new subsection 59(1), an individual has a shared care percentage if
the Secretary has made a percentage of care determination for the individual in
respect of an FTB child under new subsection 22(6A). A note at the end of this
provision indicates to the reader that the Secretary is taken to have made a
percentage of care determination under new subsection 22(6A) in a blended
family situation by operation of new paragraph 27(2)(b).
An individual’s shared care
percentage is then determined using the table in new subsection 59(2). If, for
example, the individual were determined as having 58% care of a child, then the
individual’s shared care percentage for the child would be 61% (that is, 51%
plus (2% x 5)).
New subsection 59(3) addresses the situation where the sum of the shared
care percentages under subsection 59(2) in respect of a particular FTB child
would not result in 100%. For example, A and B have 40% care and C has 20%
care of a child. The child is therefore an FTB child of both A and B but not
of C because of the new rule in section 25 (although the child may still be a
regular care child who is a rent assistance child of C). Applying the table in
subsection 59(2), A and B’s shared care percentage in respect of the child
would be 35% each. This means that the full possible amount of FTB would not
be paid in respect of the child. This is not the intention. In this situation
(and comparable situations where three or more individuals share the care of a
child), the Secretary would have a discretion (under new subsection 59(3)) to
depart from the table so that 100% of FTB can be paid in respect of the FTB
child to eligible individuals in accordance with percentages determined by the
Secretary.
Item
55 also inserts a section 59A that
replaces existing subsections 59(2) and (3). New section 59A enables the
Secretary to split payment of multiple birth allowance between individuals who
are not members of a couple in a manner determined by the Secretary. The
Secretary would also have the option of specifying that the whole of the
multiple birth allowance is to be paid to one individual.
Clause
1 of Schedule 1 to the Family Assistance Act provides some broad rules about
the FTB rate calculation process. FTB is an annual rate that comprises a Part
A rate and a Part B rate. An individual’s Part A rate can be determined using
one of two specified methods, Method 1 or Method 2. This will depend on
whether the individual’s adjusted taxable income exceeds the higher income free
area (set out in clause 2 of Schedule 1).
Items
67 to 69 make various amendments to
clause 1 to take account of new Part 3A of Schedule 1 (as inserted by item
78). Briefly, new Part 3A outlines a new method of working out an
individual’s Part A rate (Method 3) and applies where the individual has no FTB
children.
Clause
3 of Schedule 1 outlines the method by which an individual’s Part A rate is
worked out under Part 2 (Method 1). Items 70 to 72 make consequential
amendments to various provisions in clause 3 to take account of the relocation
of the rent assistance provisions to Part 5 of Schedule 1 (common provisions)
and their renumbering.
Item
73 repeals clauses 4A and 4B of
Schedule 1. These provisions enable offsetting to occur where duplicate rent
assistance payments would otherwise be paid. These provisions are relocated in
Part 5 of Schedule 1 as new clauses 38J and 38K respectively.
Item
74 makes a consequential amendment
to subclause 5(1) to reflect the relocation of the rent assistance provisions
to Part 5 of Schedule 1 (common provisions) and their renumbering.
Clause 11 of Schedule 1 ensures that a
percentage determination in relation to an FTB child is taken into account in
working out an individual’s standard rate where the individual’s Part A rate is
worked out using Method 1. Item 75 amends
clause 11 to reflect the new concept of shared care percentage in
section 59 of the Family Assistance Act (as amended).
Item 76 repeals
Divisions 3 and 4 of Part 2 of Schedule 1 to the Family Assistance Act.
Division 3
currently provides the eligibility rules and rate calculation process for rent
assistance. This Division is relocated in Part 5 of Schedule 1 as new
Subdivision A of new Division 2B of Part 5. (The rules relating to duplicate
rent assistance become new Subdivision B of new Division 2B of Part 5.)
Division 4 sets
out the income test that applies where an individual’s adjusted taxable income
does not exceed the higher income free area. This Division is relocated in
Part 5 of Schedule 1 as new Division 2C of Part 5.
These Divisions
are relocated into Part 5 of Schedule 1 because they can apply where an
individual’s Part A rate is worked out under existing Method 1 or new Method
3.
Clause 27 of Schedule 1 ensures that a
percentage determination in relation to an FTB child is taken into account in
working out an individual’s standard rate where the individual’s Part A rate is
worked out using Method 2. Item 77 amends
clause 27 to reflect the new concept of shared care percentage in
section 59 of the Family Assistance Act (as amended).
Item
78 inserts a new Part 3A (Method 3)
into Schedule 1 to the Family Assistance Act. New Part 3A will be used to work
out an individual’s Part A rate where the individual has no FTB children (but
does have at least one regular care child who is also a rent assistance child).
Part
3A – Part A rate (Method 3)
In
broad terms, the rate of FTB Part A for an individual with one or more regular
care children but no FTB children is to be worked out without reference to
specified child amounts (including the FTB Part A supplement). The
individual’s maximum rate of FTB Part A would therefore be the
individual’s rent assistance (if any). This amount would be subject to the
same income test that applies in working out an individual’s Part A rate using
Method 1. As the individual would not be entitled to child support in respect
of a regular care child under the new child support rules, the maintenance
income test would not be relevant.
New clause 28A sets out a new method statement that
is used to work out an individual’s Part A rate where Method 3 applies. The
first step is to work out the individual’s rent assistance under Subdivision A
of Division 2B of Part 5. The result is the individual’s maximum rate. The
income test set out in Division 2C of Part 5 is then applied to work out any
reduction for adjusted taxable income, which is then deducted from the
individual’s maximum rate. The result is the individual’s income tested rate,
which is the individual’s Part A rate.
An
individual’s Part A rate, as worked out under Part 3A (Method 3) may be subject
to reduction in accordance with clauses 38J and 38K (offsetting for duplicate
rent assistance).
If
the individual has one or more regular care children as well as an FTB child or
children, then the individual’s Part A rate would be worked out using either
Methods 1 or 2. The individual’s maximum rate would include the relevant FTB
child rate or rates for any FTB children of the individual. Where Method 1 is
relevant and the individual therefore has potential eligibility for rent
assistance, the individual’s regular care children who are also rent assistance
children would be relevant in determining the individual’s rate of rent
assistance.
Item
79 makes a consequential amendment
to paragraph 29B(4)(a) of Schedule 1 to take account of the new concept of shared
care percentage in section 59 (as amended).
Under
the current rules, clause 31 of Schedule 1 ensures that an individual’s
standard rate of FTB Part B has regard to a percentage determination under
subsection 59(1) as appropriate. Clause 31 is reworked by item 80 to
take account of the new concept of shared care percentage in section 59 (as
amended).
Similarly,
clause 31A of Schedule 1 ensures that the amount of an individual’s FTB Part B
supplement is worked out having regard to a relevant percentage determination
under subsection 59(1). Item 81 reworks subclause 31A(1) so that it
takes account of the new concept of shared care percentage in
section 59 (as amended).
Under
the current rules, clause 38 of Schedule 1 ensures that multiple birth
allowance is paid in accordance with a percentage determination made under
subsection 59(2). As existing subsections 59(2) and (3) of the Family
Assistance Act are being replaced with new section 59A (item 55 makes
the relevant amendment), item 82 reworks clause 38 so that multiple
birth allowance is paid in accordance with a determination under new
section 59A.
Paragraph
38A(2)(a) of Schedule 1 is reworked by item 83 so that it reflects the
concept of shared care percentage in section 59 (as amended) instead of
the existing concept of a percentage determination under subsection 59(1).
Item 84
inserts two new Divisions into Part 5 of Schedule 1.
New Division
2B contains provisions relating to rent assistance. New Subdivision A sets out
the eligibility rules for rent assistance and the methods of calculating an
individual’s rate of rent assistance in different circumstances. New
Subdivision B deals with offsetting for duplicate rent assistance. Both of
these new Subdivisions are relevant when an individual’s Part A rate is being
worked out under existing Method 1 or new Method 3.
New
Division 2C sets out the income test (applicable where an individual’s Part A
rate is worked out using existing Method 1 or new Method 3).
Division 2B – Rent Assistance
Subdivision
A – Rent Assistance
New
Subdivision A is essentially existing Division 3 of Part 2 of Schedule 1 to the
Family Assistance Act, relocated into Part 5, renumbered to take account of the
relocation and modified to cover certain regular care children.
Under
the current rules (clause 12 of Schedule 1), an individual’s eligibility for,
and rate of, rent assistance is affected by whether an FTB child of the
individual is also a rent assistance child. An FTB child is a rent assistance
child of the individual if the FTB child rate for the child exceeds the base
FTB child rate or would exceed that rate but for clause 11. The base FTB child
rate is the most an FTB child can attract if the child is aged 16 or more or is
an absent overseas FTB child.
Under
new clause 38B, the rules that prescribe when an FTB child is a rent assistance
child are the same as in existing clause 12. However, clause 38B also sets out
when a regular care child is a rent assistance child. Consistent with the FTB
child rules, a regular care child of an individual is also a rent assistance
child of the individual if the child is under 16 and is not an absent overseas
regular care child. The description of these restrictions is different for a
regular care child because there is no FTB child rate or base rate for such a
child.
New
clause 38C sets out the eligibility requirements for rent assistance. It is
modelled on existing clause 13 of Schedule 1. The main differences are as
follows.
First,
the eligibility requirement in paragraph (1)(fa) that applies to an individual
who is a relevant shared carer (defined in subsection 3(1) as an
individual who has a shared care percentage in relation to each of his or her
FTB children) will also apply to an individual who has only one or more regular
care children but no FTB children.
Second,
the amounts specified in new clause 38C are current as at the time of
introduction of the bill. Subitem 145(2) ensures that these
amounts remain current by providing for their indexation.
New
clauses 38D and 38E are modelled on existing clauses 14 and 14A respectively.
Under
the current rules, clauses 14 and 14A of Schedule 1 set out an individual’s
rate of rent assistance. Where the only children in the care of an individual
are subject to a determination under subsection 59(1) of the Family Assistance
Act, rent assistance is payable at the higher of the rates calculated under
clauses 14 and 14A. The maximum rate payable under the table in clause 14A is
comparable to the maximum rate payable under the Social Security Act to a
person without children. Clause 14A acts to reduce the risk that a person,
especially a person receiving a social security payment, could receive less
rent assistance when they accept responsibility for the care of a child, while
giving them access to the higher rate more in line with the higher costs
usually associated with a larger home needed to accommodate children.
As
mentioned above, the rent assistance eligibility requirements are being
modified so that an individual who has one or more regular care children but no
FTB children is treated in the same way as an individual who is a relevant
shared carer. Consistent with this change, new clause 38E is constructed so
that it applies to determine the rate of rent assistance payable to an
individual who is a relevant shared carer (as is currently the case with clause
14A) and also an individual who has only one or more regular care children.
This is the substantive difference between exiting clauses 14 and 14A and new
clauses 38D and 38E.
The
amounts specified in new clauses 38D and 38E are also current as at the time of
introduction of the bill. Subitem 145(2) ensures that these
amounts remain current by providing for their indexation.
New clause 38F provides that a reference to annual rent in the
tables in new clauses 38D and 38E is a reference to the annual rate being paid
or payable by the individual whose rate is being determined.
New clause 38G deals with rent paid by a member of a couple. This
provision is the same as existing clause 16 of Schedule 1.
New clause 38H deals with rent paid by a member of an illness separated
couple, respite care or temporarily separated couple. This provision is the
same as existing clause 16A of Schedule 1.
Subdivision B – Offsetting for duplicate rent
assistance
This
Subdivision contains new clauses 38J and 38K. These provisions are
substantively similar to existing clauses 4A and 4B of Schedule 1 to the Family
Assistance Act. The main difference is that the new rate calculation process
for FTB Part A using Method 3 will also be subject to the rent assistance offsetting
rules. To this end, references to new clause 28A (which sets out the method
statement for calculating an individual’s Part A rate where Method 3
applies) have been inserted into new clauses 38J and 38K where relevant.
In broad terms, the offsetting rules in new clauses 38J and 38K (and
existing clauses 4A and 4B of Schedule 1) operate to prevent duplicate payments
of rent assistance between FTB on the one hand and social security or veterans’
entitlements payments on the other hand. This is done by providing that any
rent assistance paid as part of a social security or veterans’ entitlements
payment in respect of a particular day is taken into account in calculating an
individual’s entitlement to arrears of FTB Part A in respect of that day.
Division 2C – Income test
This Division contains new clauses 38L, 38M and 38N. These new clauses
are substantively the same as existing clauses 17 to 19 of Schedule 1.
The income testing provisions in new clauses 38L, 38M and 38N will be
relevant in determining an individual’s Part A rate using existing Method 1
(there is no substantive change here) or new Method 3.
Items 85 and 86 make some consequential amendments to
paragraph 39(2)(e) of Schedule 1 to the Family Assistance Act that take
account of the relocation of the FTB Part A income test and the income free
area (new clause 38N) from 1 July 2008.
Items 87 and 88 make some consequential amendments to other
provisions in clause 39 to take account of the possibility of an individual’s
Part A rate being worked out under new Part 3A of Schedule 1 (Method 3).
Schedule 4 to the Family Assistance Act provides for the indexation of
specified amounts and rates. Item 89 makes consequential amendments to
items 4 and 5 of the table in clause 2 of Schedule 4 so that relevant rent
assistance amounts are appropriately described and abbreviated and that the new
clause references are set out in column 3. Similarly, item 90 makes
consequential amendments to item 13 of the table in clause 2 of Schedule 4,
which deals with the income free area. The new abbreviations are then
reflected in the table in subclause 3(1) by item 91.
FTB Part B will continue to be available only to individuals with an FTB
child. A regular care child would not affect the way in which an individual’s
FTB Part B rate is determined under Part 4 of Schedule 1.
Family Assistance Administration Act
There
are numerous provisions in the Family Assistance Administration Act that refer
to an FTB child. A number of these are amended to take account of regular care
children, as explained below.
Section 28B of the Family Assistance Administration Act provides for the
variation of a determination that an individual is entitled to be paid FTB by
instalment where an FTB child claims another specified payment.
Subsection 28B(1) sets out the conditions that must be satisfied for this
provision to apply. Subsections 28B(2) and (3) outline the consequences of an
application of this provision on an individual’s entitlement determination
where the child concerned is the individual’s only FTB child and where the
individual has other FTB children.
Paragraph 28B(1)(b)
is reworked by item 92 so that it also applies to a regular care child
who is a rent assistance child (in the same way as it currently applies to an
FTB child).
Subsection
28B(2) is amended so that it also covers cases where the child concerned is the
individual’s only child (counting both FTB child and regular care child), and
subsection 28B(3) is amended so that it also covers cases where the child is
not the claimant’s only child (again counting both FTB child and regular care
child). Items 93, 94 and 95 make the relevant amendments.
Notes
at the end of some of the amendments to section 28B of the Family Assistance
Administration Act change relevant headings (including the heading to
subsections 16(5) and (6)) so that they also refer to a regular care child.
Under
section 30B of the Family Assistance Administration Act, a claimant’s
entitlement determination can be varied for failure to notify an FTB child’s
departure from Australia. Amendments are made by items 96 to 99 to
ensure that this provision also applies in relation to regular care children
who depart Australia.
Subsection
30B(1) is amended so that it refers to a child who has left Australia without
the claimant notifying, whether the child is an FTB child or a regular care
child who is a rent assistance child.
Subsection 30B(2) is reworked so that a claimant’s
entitlement determination is varied with the effect that the claimant is not
entitled to be paid FTB where the claimant has not notified the absence of each
child of the claimant (whether an FTB child or a regular care child who is a
rent assistance child) or that the claimant’s rate of FTB is varied so as not
to take account of an FTB child or regular care child who is a rent assistance
child in respect of whom this provision applies.
Subdivision
D of Division 1 of Part 3 of the Family Assistance Administration Act sets out
the relevant reconciliation conditions that need to be satisfied before an
individual can access the FTB Part A and B supplements.
There
are currently references to an FTB child in sections 32J, 32K and 32P of the
Family Assistance Administration Act. Items 101, 102 and 104 amend
these provisions so they also refer to a regular care child or a regular care
child who is also a rent assistance child, as appropriate. Section 32L also
refers to an FTB child but applies where such a child is aged 16 or more. As a
child who has turned 16 cannot be a regular care child who is a rent assistance
child, a consequential amendment is not required to this provision.
Items
100 and 103 make consequential
amendments to paragraphs 32D(1)(c) and 32P(1)(b) respectively to reflect
the renumbering of the FTB income test provisions.
Under
section 33 of the Family Assistance Administration Act, the Secretary must
determine that an individual is entitled to be paid an FTB advance where
specified conditions are satisfied. The intention is that an advance would not
be available to an individual who is entitled to FTB for only a regular care
child who is a rent assistance child. Item 105 therefore modifies
subsection 33(1) so that it includes the extra condition that the
individual has at least one FTB child.
Section
71E of the Family Assistance Administration Act currently refers to an FTB
child in the context of a CCB debt that arises where an approved child care
services certifies a rate in relation to a session of care to an FTB child and
where the service knows that that rate does not apply to the child. As it will
be possible for an approved child care service to certify a rate of fee
reduction for a regular care child who is at risk or whose carer is
experiencing a specified kind of hardship under section 76 of the Family
Assistance Act, item 106 amends this provision to also include a
references to a regular care child where appropriate.
Section 228 of the Family Assistance Administration Act enables an amount
to be deducted from an individual’s entitlement to FTB where a notice has been
given under subsection 72AB(3) of the Child Support Registration and Collection
Act to this effect. The amount of the deduction will depend on, among other
things, whether some or all of the person’s FTB children are designated child
support children. The deducted amount(s) are then applied against a child
support debt that is due and payable under the child support legislation.
Items
107 to 109 amend subsections 228(3)
and (4) to ensure that regular care children who are rent assistance children
are also taken into account in applying these provisions.
Child Support Registration and Collection Act
The
amendments made to section 72AB of the Child Support Registration and
Collection Act by items 110 and 111 complement the amendments made to
section 228 of the Family Assistance Administration Act (as described above).
Paragraph 72AB(1)(b) is reworked and subsection 72AB(2) amended so that these
provisions also apply where a regular care child who is a rent assistance child
is also a designated child support child of the person.
Items
112 and 113 insert new definitions
of regular care child and rent assistance child into subsection
72AB(5) to support the amendments made to subsections 72AB(1) and (2). These
terms are defined by reference to their meanings in the Family Assistance Act.
Social
Security Act
Health Care Cards
Recommendation
1.15 of the Taskforce Report supports continued eligibility for a health care
card (HCC) for an individual who has at least 14% but less than 35% care of a
child (that is, a person with a regular care child). Amendments are made to
the Social Security Act to give effect to this aspect of recommendation 1.15.
Division
3 of Part 2A.1 of the Social Security Act sets out the qualification conditions
for a HCC. Of particular relevance are sections 6A, 1061ZK and 1061ZO of the
Social Security Act.
Section
6A provides a number of definitions that support the HCC provisions in Division
3 of Part 2A.1. There are a number of definitions in section 6A that currently
refer to an FTB child. Consequential amendments are made to these provisions
so that they also refer to a regular care child. Items 114, 115 and 116
make the relevant changes.
Item
117 repeals subsection 6A(3), which
is a superfluous provision.
Under
subsection 1061ZK(4) of the Social Security Act, a person qualifies for a HCC
on a day that the person is entitled to be paid FTB by instalment that includes
a Part A rate under Part 2 of Schedule 1 to the Family Assistance Act where the
person’s income excess for the purposes of calculating the Part A rate is nil.
This basically covers individuals who are receiving certain social security or
DVA income support payments or whose income does not exceed the income free
area specified in clause 19 of Schedule 1.
Item
125 amends paragraph 1061ZK(4)(b) to
ensure that it also covers people who are entitled to be paid FTB by instalment
that includes a Part A rate under new Part 3A of Schedule 1 to the Family
Assistance Act (in respect of a regular care child who is also a rent
assistance child).
Item
126 makes a consequential amendment
to paragraph 1061ZK(4)(c) to reflect the relocation of the FTB Part A income
test provisions.
Item
127 inserts a new subsection
1061ZK(4A) that extends qualification for a HCC to a person who has a regular
care child but is not entitled to be paid FTB by instalment (because, for
example, the regular care child is not a rent assistance child). Consistent
with existing subsection 1061ZK(4), the person’s income excess for the purposes
of Division 2C of Part 5 of Schedule 1 to the Family Assistance Act would
also need to be nil.
Section
1061ZO sets out a number of categories of qualification for a ‘low income’ HCC.
(by application). Several of the specified categories require the person to
either be or not to be an FTB child of a particular description. For example,
qualification for a HCC under subsection 1061ZO(4) requires that a person meet
residence requirements, the health care card income test and be an FTB child
who is 19 or more years of age.
Section
1061ZO does not, in its current form, cover a regular care child.
Items
128 and 129 amend various provisions
in section 1061ZO to add references to a regular care child where FTB child is
currently mentioned.
Double orphan
pension
A person’s rate of double orphan pension for a child is worked out under
section 1010 of the Social Security Act. Subsection 1010(1) sets out the rate
of double orphan pension. However, subsection 1010(2) and (3) provide for an
additional DOP payment in prescribed circumstances.
There is no capacity in this provision to split double orphan pension
where the care of a double orphan child is being shared between two or more
individuals who each attract a percentage of FTB in respect of the child.
Item
123 inserts a new subsection 1010(1A)
into the Social Security Act. Under this new provision, if a person who
qualifies for double orphan pension for a child has a shared care percentage
for that child, then the person’s rate of double orphan pension is to reflect
their shared care percentage.
If,
for example, the young person’s maternal grandmother has 40% care, then her
shared care percentage would be 35% (that is, 25% plus 2% for each percentage
point over 35% in accordance with the methodology in section 59 of the Family
Assistance Act (as amended)). The rate of double orphan pension for the
grandmother would therefore be 35% of the rate that would otherwise be
determined under subsection 1010(1) of the Social Security Act.
Similarly,
any additional double orphan pension component payable to a person with a
shared care percentage in respect of the double orphan child would be the
difference between:
·
the prior rate of family
allowance (if the child became a double orphan before 1 July 2000) or FTB Part
A that was payable for the child before the child became a double orphan,
multiplied by the person’s shared care percentage for the child; and
·
the person’s current Part A rate
for the child (which would reflect the person’s shared care percentage).
Item
124 repeals existing subsections
1010(2) and (3) and substitutes new provisions that are consistent with the
effect described above.
New
subsections 1010(2) and (3) have the same effect as the repealed provisions
except that they only apply where the person does not have a shared care
percentage in respect of the double orphan child.
New
subsections 1010(2A) and (3A) modify these rules where the person does have a
shared care percentage in respect of the double orphan child so that the
required calculations and comparisons appropriately reflect that shared care
percentage.
Item
122 makes a consequential amendment
to subsection 1010(1) by making it subject to new subsections 1010(1A) to (3A).
In
broad terms, a person can qualify for double orphan pension for a young person
who is an FTB child of the person. This qualification rule is not changing.
Furthermore, there will capacity, from 1 July 2008, to split payment of double
orphan pension between people who have a shared care percentage in respect of a
double orphan child to reflect the caring arrangements for the child.
These
changes may have an adverse effect on a small number of people receiving double
orphan pension on 30 June 2008. Saving provisions are therefore inserted by item
147 to counteract this effect. A person’s rate of double orphan pension
for a child would be preserved at the lower of the rate payable for the child
immediately before 1 July 2008 or, if the child is an FTB child on or after 1
July 2008, the rate that would be payable under section 1010 as in force
before the changes. The saved rate would continue to apply until such time as
the person would cease to qualify for double orphan pension for the child
otherwise than because of the changes to the concept of FTB child in the Family
Assistance Act or where a higher rate of double orphan pension would be payable
for the child under the new rules.
Carer allowance
Section 992J of the
Social Security Act enables carer allowance to be continued for a bereavement
period where a disabled child who is an FTB child dies. Section 992K enables
the customer to receive the bereavement payment as a lump sum.
Item 121 amends these provisions by inserting references to a
regular care child where an FTB child is mentioned. The changes ensure that
sections 992J and 992K will apply in the same way irrespective of whether
the deceased child is an FTB child or a regular care child.
Other amendments
Item
118 amends the definition of maximum
Part A rate of family tax benefit in subsection 23(1) of the Social
Security Act so that it also refers to new clause 28A of Schedule 1 to the
Family Assistance Act. New clause 28A provides a new method of working out an
individual’s Part A rate where the individual has no FTB children (but has one
or more regular care children who are also rent assistance children). An
individual’s maximum rate is worked out under step 1 of that method
statement.
Item 119 inserts a new definition of regular care child
into subsection 23(1). This term has the same meaning as given by subsection
3(1) of the Family Assistance Act.
Item 120 inserts a new definition of rent assistance child
into subsection 23(1). This term also has the same meaning as given by
subsection 3(1) of the Family Assistance Act.
Part 3.7 of the Social Security Act provides for the payment of rent
assistance as part of a person’s social security payment where appropriate.
Several provisions in Part 3.7 currently refer to clauses 4A and 4B of Schedule
1 to the Family Assistance Act (which deal with offsetting duplicate rent
assistance).
Clauses 4A and 4B are being relocated into Part 5 of Schedule 1 to the
Family Assistance Act and will be renumbered as clauses 38J and 38K
respectively (items 73 and 84 are relevant). Items 130 to 142
make the required consequential amendments to reflect this numbering change.
Veterans’ Entitlements Act 1986
Points SCH6-C3A and C3B of the Veterans’ Entitlements Act 1986
currently refer to clauses 4A and/or 4B of Schedule 1 to the Family Assistance
Act (which deal with offsetting duplicate rent assistance).
Division 2 – Application and saving provisions
PART 2 –
MAINTENANCE INCOME TEST
Background
The
MIT is relevant in working out an individual’s Part A rate using
Method 1. The calculation process is set out in the method statement in
clause 3 of Schedule 1 to the Family Assistance Act. The MIT is the second
means test that potentially applies to reduce an individual’s maximum rate of
FTB Part A. Importantly, an individual’s maximum rate of FTB Part A is the sum
of the relevant amounts specified in step 1 of the method statement in clause 3
of Schedule 1 and includes an amount in respect of each FTB child of the
individual, irrespective of whether or not that child is covered by a child
support liability. In broad terms, any child support received in the relevant
income year above the maintenance income free area (MIFA) reduces the
customer’s FTB Part A by 50 cents in the dollar until the base rate for the
individual is reached. The base rate is defined in clause 4 of Schedule 1 by
reference to the individual’s maximum rate under clause 25 if the individual’s
Part A rate were worked out under Part 3.
The
MIT may also be relevant in working out an individual’s Part A rate using
Method 2 (that is, where the individual’s adjusted taxable income exceeds the
higher income free area). The relevant provision is clause 25 of Schedule 1 to
the Family Assistance Act and more specifically, the comparison required under
step 3 of the method statement in clause 25.
The
rules relevant to the MIT are detailed in Division 5 of Part 2 of Schedule 1 to
the Family Assistance Act. An individual’s reduction for maintenance income is
worked out using the method statement in clause 20 of Schedule 1. The first
step is to annualise the amount of maintenance income received by the
individual in the relevant income year. The next step is to work out the
individual’s MIFA using the table in clause 22 – the amount of the MIFA will
depend on the individual’s family situation and number of FTB children. Again,
it is irrelevant for the purposes of working out an individual’s MIFA whether
or not the FTB child is covered by a child support liability. The difference
between the individual’s annualised maintenance income and MIFA is the
individual’s maintenance income excess. The individual’s income tested maximum
rate is then (further) reduced by half of the maintenance income excess (the
50% taper).
There
are definitions in subsection 3(1) and section 19 of the Family Assistance Act
that support the MIT provisions. These include a definition of maintenance
income, maintenance, child support and capitalised
maintenance income.
Under
recommendation 9.1, maintenance income received by a payee for one or more
children of a payer would reduce the payee’s amount of FTB Part A above the
base rate, including any rent assistance, for those children only. Any
partner maintenance from a payer would affect FTB Part A for the payer’s
children only. To this end, amendments are made to introduce a MIT ceiling that
would represent the amount of maintenance income that limits the maximum
reduction under the MIT to the children for whom maintenance income is paid.
Any amounts paid in excess of that ceiling would be disregarded for the
purposes of applying the MIT.
Also, the additional MIFA for each FTB child after
the first would be limited to FTB children of an individual for whom the
individual or the individual’s partner is entitled to apply for maintenance
(whether under the Child Support Assessment Act or the Family Law Act).
Amendments are made to clause 22 of Schedule 1 to achieve this. The additional
MIFA would also continue to exclude an FTB child for whom maintenance income is
disregarded under step 1 of the method statement in clause 20 of Schedule 1.
For example, an FTB child for whom child support is payable but who has turned
16 would continue to be excluded, as the FTB child rate for such a child is
restricted to the base FTB child rate.
For example, if a payee receives child support for a
child from a previous relationship, and the payee also has care of a second
child from the payee’s current relationship, the child support for the first
child would only affect the amount of FTB Part A above the base rate for the
first child. This would be achieved by disregarding any child support received
for the child above the relevant MIT ceiling. Also, there would be no
additional MIFA for the non‑child support child.
Where
a payee is entitled to maintenance income from two or more payers, the maintenance
income from one payer would only reduce FTB for children of that payer, and
would not affect FTB for children of the other payer(s) or any other children.
Explanation of the changes
Division 1 – Amendments
Family Assistance Act
Items
148 and 149 insert notes at the end
of the definitions of capitalised maintenance income and maintenance
income, which refer the reader to section 19 of the Family Assistance Act.
Section 19 affects the operation of these definitions. These changes are not
substantive but are made to improve readability.
Items
150 and 151 make some technical
changes to the headings in the table in clause 7 of Schedule 1 to the Family
Assistance Act. These changes make it clear that an individual’s standard rate
under clause 7 is the sum of the FTB child rates applicable to each FTB child
of the individual.
Item
152 inserts new clause 19AA into
Schedule 1 to the Family Assistance Act. This new provision makes it clear
that any references in the MIT provisions to an individual being, or not being,
entitled to apply for maintenance income include references to an individual
who is, or is not, entitled to apply for maintenance income under the Child
Support Assessment Act or the Family Law Act.
Clause
20 of Schedule 1 to the Family Assistance Act contains a method statement that
sets out the MIT. The first step is to annualise the amount of the
individual’s maintenance income (which can, by virtue of clause 21, include a
partner’s maintenance income as relevant). Item 153 ensures that in
doing so, any maintenance income received by the individual or their partner
from a maintenance payer that is over the maintenance income ceiling is
disregarded. This new ‘disregard’ is set out in new paragraph (d) of step 1 of
the method statement in clause 20.
The
maintenance income ceiling is then worked by applying the new rules in
Subdivisions C and D of Division 5 as relevant.
An
individual’s MIFA is worked out under clause 22 of Schedule 1 to the Family
Assistance Act. Item 154 amends clause 22 so that children in respect
of whom neither the individual nor the individual’s partner is entitled to
apply for maintenance income are disregarded for the purposes of working out an
individual’s MIFA.
Item
155 inserts new Subdivisions C and D
into Division 5 of Part 2 of Schedule 1 to the Family Assistance Act. These
new Subdivisions set out the rules for working out the maintenance income
ceiling for maintenance income received by an individual or their partner from
a particular maintenance payer.
In broad terms, the maintenance income ceiling amount for maintenance
income from a particular payer represents the maximum amount of maintenance
income that an individual payee can receive from the payer before payment of
the above base amount of FTB Part A, including rent assistance, in respect of
the payer’s children is totally reduced. The maintenance income ceiling is
therefore the maximum amount of maintenance income from the payer that can be
taken into account under the MIT under recommendation 9.1 of the Taskforce
Report. Any maintenance income received from the payer that exceeds the MIT
ceiling would be disregarded for the purposes of the MIT. That way, these
amounts will not have the effect of reducing the individual’s Part A rate in
respect of other FTB children of the payee.
Subdivision C – Maintenance income ceiling for Method 1
Where
an individual’s Part A rate is worked out using Part 2 of Schedule 1
(Method 1), the maintenance income ceiling for maintenance income received
by the individual or their partner from a particular payer would be worked out
under new Subdivision C.
The
exception, where it is not necessary to work out a maintenance income ceiling
and which is covered by new clause 24F, is where the individual and their
partner between them are only entitled to apply for maintenance income from the
one maintenance payer in respect of all of the FTB children of the individual
and partner. In this situation, there are no non-maintenance FTB children that
need to be excluded from the application of the MIT and therefore no need to
apply the new maintenance income ceiling rules.
New
clause 24G sets out the method of working out an individual’s maintenance
income ceiling for maintenance income received by the individual or their
partner from a particular maintenance payer where the individual’s Part A rate
is worked out under Method 1. The method statement involves working out an
individual’s above base standard amount, RA amount and MIFA
amount. These various components then link into a formula in new clause
24L under which the individual’s maintenance income ceiling is determined.
The individual’s above base standard amount for the maintenance
income is worked out using new clause 24H. Given that the MIT can only reduce
the maximum FTB Part A rate to the base rate, an individual’s above base
standard amount is the difference between:
- the
individual’s standard rate (worked out under clauses 7 to 11) for the FTB
children of the individual in respect of whom the individual or their
partner is entitled to apply for maintenance income from the particular
payer concerned; and
- the
individual’s standard rate for those children under clauses 26 and 27,
assuming the individual’s Part A rate were calculated under Part 3.
The
individual’s RA amount for the maintenance income is worked out using
the method statement in new clause 24J. In broad terms, the individual’s RA
amount is the amount of rent assistance that is apportioned to the maintenance
children of the particular payer.
The first step in the method statement in new clause 24J is to work out
the individual’s rent assistance. This calculation will have regard to all of
the FTB and regular care children in the family irrespective of whether or not
the individual or their partner is entitled to apply for maintenance income in
respect of one or more of those children.
The
second step is to work out the amount that would be the individual’s rent
assistance having regard only to those children in respect of whom neither the
individual nor their partner is entitled to apply for maintenance income.
If
there is only one maintenance payer from whom the individual and their partner
between them are entitled to apply for maintenance income, then the
individual’s RA amount is the difference between the step 1 and 2 amounts (step
3 of the method statement in new clause 24J refers).
If there is more than one maintenance payer, then the amount that is the
difference between the step 1 and 2 amounts needs to be apportioned between the
children in the family in respect of whom the individual or their partner is
entitled to apply for maintenance income. This apportioning ensures that an
individual’s RA amount reflects the number of children of a particular payer in
respect of whom the individual or their partner is entitled to claim
maintenance income. The application of step 4 of the method statement in new
clause 24J achieves this outcome.
For example, a customer has four children
under 16, two of whom are maintenance children of one payer, and two are not maintenance children. The rent assistance rate for four children is
$3,485.75 pa, and the rent assistance rate for two children is $3,084.25 pa.
Therefore, the individual’s RA amount for the two maintenance children would be $401.50 pa ($3,485.75 - $3,084.25).
The individual’s MIFA amount for the maintenance income is worked out
using new clause 24K.
If there is only one maintenance payer from whom the individual and their
partner between them are entitled to apply for maintenance income, then the
individual’s MIFA amount is the amount of the MIFA worked out under
clause 22 of Schedule 1 to the Family Assistance Act (new subclause 24K(1)
refers).
If there is more than one maintenance payer, then the individual’s MIFA
amount for a particular payer is worked out using the formula in new subclause
24K(2). The formula provides a method whereby the MIFA can be apportioned
equally between the children in the family in respect of whom the individual or
their partner is entitled to apply for maintenance income (this is necessary
because the MIFA is not a per child amount but rather a basic amount plus an
additional amount per child after the first) and attributed to the children of
a particular payer. This would mean that the MIT reduction due to the
maintenance income from each payer would receive an appropriate proportion of
the total MIFA.
An example of how the formula in new subclause 24K(2) (which enables the
MIFA to be apportioned) would work is as follows.
An FTB customer receives maintenance income from one
payer for three children and the customer’s current partner also receives
maintenance income from one payer for one child. Using 2006-07 rates and in
accordance with clause 22 of Schedule 1 to the Family Assistance Act, the MIFA
would be $2,430.90 + (3 x $405.15) = $3,646.35. The individual’s no child
amount would equal the ‘one child’ amount ($2,430.90 in this example) less
a notional amount for the first child of $405.15, which equals the additional amount
for one child). This gives a no child amount of $2,025.75 in this example.
The customer’s apportioned MIFA would be ($2,025.75 / 2) + (3 x
$405.15) = $2,228.325, and the partner’s apportioned MIFA would be
($2,025.75 / 2) + (1 x $405.15) = $1,418.025.
New clause 24L sets out the formula for determining an individual’s
maintenance income ceiling. Under the specified formula, the above base
standard amount for the maintenance income is added to the RA amount for the
maintenance income and the total is multiplied by 2. It is necessary to double
the combined total of these amounts to reflect the 50% taper that applies under
the MIT. This taper is provided for in step 6 of the method statement in
clause 20 of Schedule 1 and ensures that an individual’s reduction for
maintenance income is half the individual’s maintenance income excess (which is
the amount by which the individual’s maintenance income exceeds the
individual’s MIFA). The MIFA amount is then added to the result to arrive at
the individual’s maintenance income ceiling for the maintenance income received
by the individual or their partner from a particular maintenance payer.
The following is an example of how an individual’s maintenance income
ceiling is worked out in a given scenario.
An individual has one child aged 10 in respect of
whom the individual is entitled to apply for maintenance income (the
maintenance child) and one child of a new relationship aged 2.
The individual’s above base standard rate for each
child is $2,489.30 pa. This amount is the standard rate for an FTB child
aged under 13 years set out in clause 7 of Schedule 1 (which is currently
$3,671.90) minus the standard child rate for an FTB child aged under 18 years
set out in subclause 26(2) of Schedule 1 (which is currently $1,182.60). The
individual’s above base standard amount for the maintenance child is therefore
$2,489.30.
If the individual is eligible for maximum rent
assistance of $3,084.25 pa, the individual’s RA amount for the maintenance
child is nil (because the rent assistance rates for two children and for one
child are the same).
The individual’s MIFA from July 2008 would be based on
one child (not two), as there is only one maintenance child. The individual’s
MIFA would be $1,215.45 pa. As there is only one maintenance payer, the
individual’s MIFA amount is all of the individual’s MIFA of $1,215.45 pa.
In this example, the maintenance income ceiling for
maintenance income from the one maintenance payer for one maintenance child
would be:
2 x ($2,489.30 + $0) + $1,215.45 =
$6,194.05 pa
Subdivision D – Maintenance income ceiling for the purposes of comparison
for Method 2
The MIT can be relevant in some
circumstances where Part 3 of Schedule 1 to the Family Assistance Act applies
to work out an individual’s Part A rate.
It is possible for an individual with a large family to be receiving more
than the base rate of FTB Part A when the individual’s adjusted taxable income
equals the higher income free area (that is, Method 1 applies). If the individual’s
income exceeds the higher income free area and Method 2 applies, the
individual’s rate of FTB Part A will be less than what would have been the
individual’s income and maintenance tested Method 1 rate (see step 3 of the
method statement in clause 3 of Schedule 1) if Method 1 had applied. Step
3 of clause 25 therefore ensures that the Part A rate calculated under clause
25 is subject to a comparison with what would be the individual's income and
maintenance tested rate under Step 3 of clause 3 of Schedule 1 if the
individual's Part A rate were worked out using Part 2 of Schedule 1. The
higher of the two rates would apply. However, the resultant rate would remain
a Method 2 rate. It is therefore possible for the MIT to be relevant in
working out an individual’s Part A rate using Method 2.
In
these circumstances, the maintenance income ceiling for maintenance income
received by the individual or their partner from a particular payer would be
worked out in accordance with the method statement in new clause 24N. The
method statement involves working out an individual’s standard amount, LFS
amount, multiple birth allowance, supplement amount, RA
amount and MIFA amount. These various components then link into a
formula in new clause 24S under which the individual’s maintenance income
ceiling for a particular maintenance payer is determined.
Consistent
with new clause 24F, new clause 24M does not apply where the individual and
their partner between them are only entitled to apply for maintenance income
from the one maintenance payer in respect of all of the FTB children of the
individual and partner.
Where an individual’s adjusted taxable income exceeds the higher income
free area, the MIT may apply due to step 3(b) in clause 25 of Schedule 1 to the
Family Assistance Act. In these cases, the MIT can reduce the individual’s FTB
Part A rate to nil, rather than being limited to the base rate (as is the case
where the individual’s adjusted taxable income is equal to or less than the
higher income free area). It is therefore necessary to apportion all
components that make up an individual’s maximum rate of FTB Part A, rather than
just the amount above the base rate. These components are the individual’s
standard rate, large family supplement (LFS), multiple birth allowance, FTB
Part A supplement and rent assistance.
Under new clause 24P, an individual’s standard amount is the individual’s
standard rate for the relevant maintenance children of the particular payer.
An individual’s standard rate is the total of the relevant FTB child rates,
having regard to any shared care percentage applicable in respect of one or
more of the relevant children (clauses 7 to 11 of Schedule 1 to the Family
Assistance Act are relevant).
For example, for an individual with one maintenance
child aged 10 and one child of a new relationship aged 2, the amount of
standard rate for each child is $3,671.90. Therefore, the individual’s
standard amount for the maintenance child is $3,671.90.
An
individual’s LFS amount is worked out using the method statement in new clause
24Q. The method is not dissimilar to the method used to determine an
individual’s RA amount and is necessary because large family supplement, like
rent assistance, is not a per child amount.
The first step in the method statement in new clause 24Q is to work out
the individual’s large family supplement in respect of all of the individual’s
FTB children (both maintenance and non-maintenance
children). The amount of large family supplement is worked out under
Division 1 of Part 5 of Schedule 1 to the Family Assistance Act.
The
second step is to work out the amount that would be the individual’s large
family supplement having regard only to those children in respect of whom
neither the individual nor their partner is entitled to apply for maintenance
income.
If
there is only one maintenance payer from whom the individual and their partner
between them are entitled to apply for maintenance income, then the
individual’s LFS amount is the difference between the step 1 and 2 amounts
(step 3 of the method statement in new clause 24Q refers).
If there is more than one maintenance payer, then the amount that is the
difference between the step 1 and 2 amounts needs to be apportioned between the
children in the family in respect of whom the individual or their partner is
entitled to apply for maintenance income. This apportioning ensures that an
individual’s LFS amount reflects the number of children of a particular payer
in respect of whom the individual or their partner is entitled to claim
maintenance income. The application of the formula in step 4 of the method
statement in new clause 24Q achieves this outcome.
For example, a customer has
four children, two of whom are maintenance children of one payer, and two are
not maintenance children. The amount of large family supplement for four
children is $511 pa. The large family supplement for two children is nil.
Therefore, the apportioned amount of LFS for the two maintenance children would
be $511 pa.
If the children of a multiple birth are the maintenance children of a
payer, the multiple birth allowance for those children is the amount worked out
under existing clauses 36 to 38 of Schedule 1 to the Family Assistance Act
(step 3 of the method statement in new clause 24N refers).
Under
new clause 24R, the apportioning of the FTB Part A supplement would be the same
as for the standard amount, that is, the amount for the relevant maintenance
children.
The
individual’s RA amount for the maintenance income is worked out in the same way
for the purposes of new Subdivisions C and D. The method is set out in new
clause 24J.
The individual’s MIFA amount for the maintenance income is also worked
out in the same way for the purposes of new Subdivisions C and D. The method
is set out in new clause 24K.
Under
new clause 24S, an individual’s maintenance income ceiling for maintenance
income received by the individual or their partner from a particular
maintenance payer is determined by multiplying the total of the amounts worked
out under steps 1 to 5 of the method statement in new clause 24N (the apportioned
components of the individual’s maximum rate of FTB Part A under Method 1) by
two (to reflect the 50% taper) and adding the individual’s MIFA amount for the
maintenance income to the result.