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13314 CAT. NO. 97 2735 3 ISBN 0644 518073
1997-98
THE PARLIAMENT OF THE COMMONWEALTH OF AUSTRALIA
HOUSE OF REPRESENTATIVES
CHILD SUPPORT LEGISLATION AMENDMENT BILL 1998
EXPLANATORY MEMORANDUM
(Circulated by authority of the
Assistant Treasurer, Senator the Hon Rod Kemp)
1. Child support adjusted formula income amounts.................................................................. 11
2. Information disclosure on assessment notice................................................................ ...... 23
3. Minimum liability ($260)...................................................................................................... 25
4. Private collection between parties........................................................................................ 31
5. Effect of care arrangements on assessments........................................................................ 35
6. Starting date of liability..................................................................................................... 41
7. Election by carer to end liability........................................................................................... 43
8. Extension of child support for secondary students............................................................... 45
9. Notification requirements ..................................................................................................... 47
10. Payments temporarily held in Child Support Reserve.......................................................... 51
11. Debts offset between parents ................................................................................................ 53
12. Objections to decisions of the Child Support Registrar........................................................ 55
13. Departure from administrative assessment........................................................................... 59
14. Adjustment of child support income base ............................................................................. 63
15. Assessment on most recent taxable income .......................................................................... 67
16. Flexible due dates for child support...................................................................................... 81
17. Estimate requirements........................................................................................................... 91
18. Parent applications............................................................................................................... 93
19. Family Allowance income credit for person paying child maintenance............................... 97
20. Miscellaneous technical corrections.................................................................................... 101
This Bill amends the Child Support (Assessment) Act 1989 to modify the child support administrative formula by:
• increasing the paying parent's exempted income amount by 10%
• including an allowance for a shared care child in the exempted income amount
• lowering the payee's disregarded income amount, halving the effect where the payee's income exceeds that amount, and removing the automatic inclusion for formal child care costs.
Date of effect: On the day on which the Act receives Royal Assent and will not apply in relation to the 1997-98 child support year or any earlier child support year.
Proposal announced: Joint Media Release of the Minister for Social Security and the Assistant Treasurer dated 30 September 1997.
Financial impact: Costs of $10.449 million in 1998-99 rising to $12.351 million in 2001-02 being primarily made up of Family Payment outlays.
Compliance cost impact: Nil
This Bill amends the Child Support (Assessment) Act 1989 to limit the disclosure of information relating to children of a parent on the notice of assessment.
Date of effect: On the day on which the Act receives Royal Assent.
Proposal announced: Joint Media Release of the Minister for Social Security and the Assistant Treasurer dated 30 September 1997.
Financial impact: Nil
Compliance cost impact: Nil
This Bill amends the:
• Child Support (Assessment) Act 1989 to provide for a $260 minimum annual rate of child support
• Child Support (Registration and Collection) Act 1988 to allow the Registrar to request deductions to be made from social security pensions and benefits and applied towards child support liabilities
• Social Security Act 1991 to require deductions to be made from social security pensions and benefits where requested by the Child Support Registrar.
Date of effect: On the day on which the Act receives Royal Assent and will not apply in relation to the 1997-98 child support year or any earlier child support year. The amendments to the Child Support (Registration and Collection) Act 1988 and the Social Security Act 1991 will commence on 1 July 1998.
Proposal announced: Joint Media Release of the Minister for Social Security and the Assistant Treasurer dated 30 September 1997.
Financial impact: Estimated administrative costs of $2.914 million in 1998-99 and $2.620 million in 1999-00 in order to make deductions from social security pensions and benefits.
Compliance cost impact: Nil
The Bill amends the Child Support (Registration and Collection) Act 1988 to encourage parents to take greater responsibility for their child support arrangements.
Date of effect: On 1 July 1998.
Proposal announced: Joint Media Release of the Minister for Social Security and the Assistant Treasurer dated 30 September 1997.
Financial impact: Estimated program running cost savings to the year 2001-02 totalling $42.06 million. (If 75% of cases need to have collection by the Registrar resumed, then savings would be $19.901 million. If 25% of cases need to have collection by the Registrar resumed, then savings would be $63.099 million.)
Compliance cost impact: Nil
This Bill amends the Child Support (Assessment) Act 1989 to enable administrative assessments to:
• include a step-child as a relevant dependent child where the paying parent has a legal duty to maintain a step-child
• reflect parents' agreement about care arrangements for their children
• reflect both the factual and lawful daily care of a child.
Date of effect: On the day on which the Act receives Royal Assent and will not apply in relation to the 1997-98 child support year or any earlier child support year.
Proposal announced: Joint Media Release of the Minister for Social Security and the Assistant Treasurer dated 30 September 1997.
Financial impact: Nil
Compliance cost impact: Nil
This Bill amends the Child Support (Assessment) Act 1989 to provide that the starting date of liability for an administrative assessment of child support is the date the application is made to the Registrar.
Date of effect: On the day on which the Act receives Royal Assent and will not apply to applications for administrative assessment made before 1 July 1998.
Proposal announced: Joint Media Release of the Minister for Social Security and the Assistant Treasurer dated 30 September 1997.
Financial impact: Nil
Compliance cost impact: Nil
This Bill amends the Child Support (Assessment) Act 1989 to allow a person in receipt of the more than minimum rate of Family Allowance to elect to end their administrative assessment where approval based on risk assessment has been granted by the Secretary to the Department of Social Security.
Date of effect: On 1 July 1998.
Proposal announced: Joint Media Release of the Minister for Social Security and the Assistant Treasurer dated 30 September 1997.
Financial impact: Recurrent program and running costs are being met. 1997-98 costs are $2.261 million. 1998-99 costs are 2.439 million.
Compliance cost impact: Nil
This Bill amends the Child Support (Assessment) Act 1989 and the Child Support (Registration and Collection) Act 1988 to enable a child support assessment to continue to the end of the school year in which a full-time secondary student turns 18.
Date of effect: On the day on which the Act receives Royal Assent and will not apply in relation to the 1997-98 child support year or any earlier child support year. The amendments to the Child Support (Registration and Collection) Act 1988 will commence on 1 July 1998.
Proposal announced: Joint Media Release of the Minister for Social Security and the Assistant Treasurer dated 30 September 1997.
Financial impact: Nil
Compliance cost impact: Nil
This Bill amends the Child Support (Assessment) Act 1989 and the Child Support (Registration and Collection) Act 1988 to modify the:
• date of effect of information provided to or obtained by the Registrar
• manner in which information is provided to the Registrar.
Date of effect: On the day on which the Act receives Royal Assent and will not apply in relation to the 1997-98 child support year or any earlier child support year. The amendments to the Child Support (Registration and Collection) Act 1988 will commence on 1 July 1998.
Proposal announced: Joint Media Release of the Minister for Social Security and the Assistant Treasurer dated 30 September 1997.
Financial impact: Nil
Compliance cost impact: Nil
This Bill amends the Child Support (Registration and Collection) Act 1988 to allow the Registrar to hold in Reserve money collected where a paying parent has lodged an application to the Family Court seeking a declaration that they are not a person from whom child support may be sought.
Date of effect: On 1 July 1998.
Proposal announced: Joint Media Release of the Minister for Social Security and the Assistant Treasurer dated 30 September 1997.
Financial impact: Nil
Compliance cost impact: Nil
This Bill amends the Child Support (Registration and Collection) Act 1988 to allow for debts between two persons who owe child support in respect of their children to be offset.
Date of effect: On 1 July 1998.
Proposal announced: Joint Media Release of the Minister for Social Security and the Assistant Treasurer dated 30 September 1997.
Financial impact: Nil
Compliance cost impact: Nil
This Bill amends the Child Support (Assessment) Act 1989 to give clients the right to lodge objections to decisions made by the Registrar.
Date of effect: Immediately after the commencement of the "Departure from Administrative Assessment" amendments in Schedule 13 and will not apply in relation to the 1997-98 child support year or any earlier child support year.
Proposal announced: Joint Media Release of the Minister for Social Security and the Assistant Treasurer dated 30 September 1997.
Financial impact: Nil
Compliance impact: Nil
This Bill amends the Child Support (Assessment) Act 1989 to improve the process for departure from administrative assessment of child support.
Date of effect: Immediately after the commencement of the "Child Support Adjusted Formula Income Amounts" amendments in Schedule 1 and will not apply in relation to the 1997-98 child support year or any earlier child support year.
Proposal announced: Joint Media Release of the Minister for Social Security and the Assistant Treasurer dated 30 September 1997.
Financial impact: Nil.
Compliance cost impact: Nil
This Bill amends the Child Support (Assessment) Act 1989 to modify the income on which a child support liability is raised to include rental property losses and exempt foreign income.
Date of effect: Immediately after the commencement of "Objections to Decisions of the Child Support Registrar" amendments in Schedule 12 and will not apply in relation to the 1998-99 child support year or any earlier child support year.
Proposal announced: Joint Media Release of the Minister for Social Security and the Assistant Treasurer dated 30 September 1997.
Financial impact: Estimated savings of $3.215 million commencing in 1999-00 will be generated from the proposal representing increased clawback from Social Security outlays.
Compliance cost impact: Nil
This Bill amends the Child Support (Assessment) Act 1989 to enable a child support assessment to be calculated using the taxable income for the financial year immediately preceding the assessment.
Date of effect: Immediately after the commencement of "Adjustment of Child Support Income Base" amendments in Schedule 14 and will not apply in relation to the 1998-99 child support year or any earlier child support year.
Proposal announced: Joint Media Release of the Minister for Social Security and the Assistant Treasurer dated 30 September 1997.
Financial impact: Nil
Compliance cost impact: Nil
This Bill amends the Child Support (Registration and Collection) Act 1988 to enable payers to elect to pay their child support in accordance with a nominated period rather than having to pay a monthly amount on the 7th of each month.
Date of effect: On 1 July 1998.
Proposal announced: Joint Media Release of the Minister for Social Security and the Assistant Treasurer dated 30 September 1997.
Financial impact: Nil
Compliance cost impact: Nil
This Bill amends the Child Support (Assessment) Act 1989 to modify the current estimate election provisions by:
• extending the latest date for lodgment of an income estimate to 31 July
• allowing the Registrar to reject an estimate election.
Date of effect: Immediately after the commencement of the "Child Support Adjusted Formula Income Amounts" amendments in Schedule 1 and will not apply in relation to the 1997-98 child support year or any earlier child support year.
Proposal announced: Joint Media Release of the Minister for Social Security and the Assistant Treasurer dated 30 September 1997.
Financial impact: Nil
Compliance cost impact: Nil.
This Bill amends the Child Support (Assessment) Act 1989 to allow a person to apply for an administrative assessment to pay child support.
Date of effect: On the day on which the Act receives Royal Assent and will not apply to applications for administrative assessment made before 1 July 1998.
Proposal announced: Joint Media Release of the Minister for Social Security and the Assistant Treasurer dated 30 September 1997.
Financial impact: Nil
Compliance cost impact: Nil
This Bill amends the Social Security Act 1991 so that 50% of any child support paid by a paying parent will be deducted from the income which is used to calculate their entitlement to Family Allowance.
Date of effect: On 1 July 1998 and will not apply in relation to Family Allowance payments made before 1 July 1998.
Proposal announced: Joint Media Release of the Minister for Social Security and the Assistant Treasurer dated 30 September 1997.
Financial impact: Cost of $0.925 million in 1997-98, then rising from $10.264 million in 1998-99 to $10.826 million in 2001-02 being primarily made up of Family Allowance outlays.
Compliance cost impact: Nil
This Bill will amend the Child Support (Assessment) Act 1989 to correct errors and out of date references.
Date of effect: On the day on which the Act receives Royal Assent.
Proposal announced: Not announced
Financial impact: Nil
Compliance cost impact: Nil
1.1 Schedule 1 of the Bill will amend the Child Support (Assessment) Act 1989 (the Assessment Act) to modify the child support administrative formula by:
• increasing the paying parent's exempted income amount by 10%
• including an allowance for a shared care child in the exempted income amount
• lowering the payee's disregarded income amount, halving the effect where the payee's income exceeds that amount, and removing the automatic inclusion for formal child care costs.
1.2 The purpose of the amendments is to address community concerns regarding the operation of the child support administrative formula by:
• increasing the paying parent's exempted income amount by 10%
• increasing the exempted income amount of parents with a shared care child
• reducing the level at which the carer's income affects the amount of child support payable
• halving the rate at which the carer's excess income reduces the child support payable
• removing the automatic inclusion of a child care component in the carer's disregarded income and instead including high child care costs as a ground for departure from assessment.
1.3 On the day on which the Act receives Royal Assent and will not apply in relation to the 1997-98 child support year or any earlier child support year.
1.4 Child support is assessed according to a formula and is based on each parent's income from two years prior to the child support year. An amount of the paying parent's income is exempted from the calculation of child support payable and is referred to as the exempted income amount. The basic exempted income amount is the unpartnered rate of social security pension. A paying parent who has care for another of his or her children has an exempted income amount of twice the partnered rate of social security pension plus an allowance for each child. This only applies to children who are in the care of the paying parent for 60 per cent or more of the year.
1.5 Where care of the children is shared between the parents, the child support that would be payable by each parent to the other is offset. The difference is payable by the parent with the higher liability. In this situation, neither parent receives an allowance for a "shared care child" as shared care is less than 60 per cent of the year.
1.6 Where a carer has sole care of a child his or her income may affect the amount of child support payable if that income exceeds the disregarded income amount. The disregarded income amount is currently based on the average weekly earnings of full time adults. An additional allowance representing child care costs is included for each child less than twelve years of age at the start of the child support year.
1.7 Where the carer's income exceeds the disregarded amount the excess reduces the adjusted income amount of the paying parent. This results in a decrease in the rate of child support payable by the paying parent. At present, the full amount of the carer's excess income is deducted from the paying parent's adjusted income amount.
1.8 The proposed amendments address recommendations of the Joint Select Committee on Certain Family Law Issues (the Joint Committee) but not to the extent recommended.
1.9 The Joint Committee carried out an examination of the operation and effectiveness of the Child Support Scheme. The Joint Committee highlighted a number of community concerns in the Report dated November 1994, including some concerns regarding the operation of the administrative formula and made a number of recommendations:
• Recommendation 118 proposed that the carer's disregarded income be lowered to the pension cut out point
• Recommendation 119 proposed that the effect of the carer's income above the disregarded income level be changed from the current dollar for dollar reduction of the paying parent's income upon which child support is calculated to a 50 cents in the dollar reduction
• Recommendation 120 proposed that the additional amounts for child care costs in the disregarded income amount be abolished
• Recommendation 123 proposed that the paying parent's exempt income component of the basic formula be increased by 20%
• Recommendation 140 proposed that parents sharing care of a child have the same exempt income level as liable parents with a relevant dependent child.
1.10 The proposed amendments will increase the exempted income amount of a paying parent by 10% by providing that the exempted amount be 110% of the annual amount of unpartnered rate of social security pension. [Item 2 - amend paragraph 39(1)(a)]
EXAMPLE
1997/98 Assessment prior to proposed changes
Payer's exempted income
Peter has no children in his care. He is liable to pay Francine for 3 children aged 10, 13 and 17. Peter's 1995/96 taxable income was $42,000. Francine's 1995/96 taxable income was $14,000 and is too low to affect the assessment.
Peter's 1995/96 taxable income $42,000
Adjust by 4.5% inflation factor + $ 1,890
Peter's child support income amount = $43,890
Less exempted income amount − $ 9,006
Peter's adjusted income amount = $34,884
Multiply by child support percentage × 32%*1
Peter's child support annual rate = $11,163
(*1 Rate for 3 children)
1998/99 Assessment after proposed changes
Paying parent's exempted income amount has increased by 10%
Peter has no children in his care. He is liable to pay Francine for 3 children aged 10, 13 and 17. Peter's 1996/97 taxable income was $42,000. Francine's 1996/97 taxable income was $14,000 and is too low to affect the assessment.
Peter's 1996/97 taxable income $42,000
Adjust by 4% inflation factor + $ 1,680
Peter's child support income amount = $43,680
Less exempted income amount − $ 9,947
Peter's adjusted income amount = $33,733
Multiply by child support percentage × 32%*1
Peter's child support annual rate = $10,795
(*1 Rate for 3 children)
1.11 The proposed amendments will increase the exempted income amount of a paying parent who is caring for another of his or her children by 10% by providing that the exempted amount be 220% of the annual amount of partnered rate of social security pension. [Item 3 - amend subparagraph 39(1)(b)(i)]
1.12 Currently, two parents may share in the care of a child or children. In this situation both parents are treated as paying parents but neither parent receives an additional allowance for that child in their exempted income amount.
1.13 The proposed amendment will provide that an additional amount be included in the exempted income amount of each parent for the shared care child. [Item 6 - repeal subsection 48(d) and insert new subsection 48(d)]
1.14 The shared care child will be taken to be a child who is in the care of each parent, for the calculation of the additional amount to be included in the exempted income amount. This will mean the paying parents will be entitled to the 10% increase in the exempted income which is pegged to the social security pension as well as an additional amount for each shared care child. [Item 7 - insert new subsection 48(2)]
EXAMPLE
1997/98 Assessment prior to proposed changes
No allowance for a shared care child
Peter and Francine share the care of one child aged 13. Peter is liable to pay Francine for 2 other children aged 10 and 17. Peter's 1995/96 taxable income was $42,000. Francine's 1995/96 taxable income was $14,000 and is too low to affect the assessment because it is below the exempted income amount that applies to a parent with a child in their care.
Peter's 1995/96 taxable income $42,000
Adjust by 4.5% inflation factor + $ 1,890
Peter's child support income amount = $43,890
Less exempted income amount − $ 9,006
Peter's adjusted income amount = $34,884
Multiply by child support percentage × 30%*1
Peter's child support annual rate = $10,465
(*1 Rate for 2.5 children)
1998/99 Assessment after proposed changes
An allowance for a shared care child
Peter and Francine share the care of one child aged 13. Peter is liable to pay Francine for 2 other children aged 10 and 17. Peter's 1996/97 taxable income was $42,000. Francine's 1996/97 taxable income was $14,000 and is too low to affect the assessment because it is below the exempted income amount that applies to a parent with a child in their care.
Peter's 1996/97 taxable income $42,000
Adjust by 4% inflation factor + $ 1,680
Peter's child support income amount = $43,680
Less exempted income amount − $12,596
Peter's adjusted income amount = $31,084
Multiply by child support percentage × 30%*1
Peter's child support annual rate = $ 9,325
(*1 Rate for 2.5 children)
1.15 Currently, a carer's disregarded income amount is equal to the latest estimate of the full time average weekly total earnings (AWE) for persons in Australia (published by the Australian Statistician before 1 January immediately before the child support year) plus an amount representing child care costs for each child under 12 years of age.
1.16 The proposed amendments reduce the carer's disregarded income amount to a level which protects the living standards of children without creating employment disincentives for the carer.
1.17 The carer's disregarded income amount will be based on the yearly equivalent of the estimated average weekly earnings for all employees (EAWE) for persons in Australia (published by the Australian Statistician before 1 January immediately before the child support year). [Item 12 - amend subsection 154]
1.18 The term EAWE will be defined. [Item 1 - insert new definition of "EAWE amount" in section 5]
1.19 The EAWE amount will be included in the figures the Registrar publishes in the Gazette each year. [Item 13 - amend subsection 155(a)]
1.20 Currently, the excess of the carer's child support income amount over the disregarded income amount is deducted dollar for dollar from the paying parent's adjusted income amount.
1.21 The proposed amendments will result in the excess of the carer's child support income amount reducing the paying parent's adjusted income amount at the rate of 50 cents for every dollar. [Item 4 - amend subsection 44(1)]
EXAMPLE
1997/98 Assessment prior to proposed changes.
Payer's adjusted income is reduced by the carer's excess income dollar for dollar
Peter has no children in his care. He is liable to pay Francine for 3 children aged 10, 13 and 17. Peter's 1995/96 taxable income was $42,000. Francine's 1995/96 taxable income was $48,000.
Peter's 1995/96 taxable income $42,000
Adjust by 4.5% inflation factor + $ 1,890
Peter's child support income amount = $43,890
Less exempted income amount − $ 9,006
Peter's adjusted income amount = $34,884
Multiply by child support percentage × 32%*1
(*1 Rate for 3 children)
Francine's 1995/96 taxable income $48,000
Adjust by 4.5% inflation factor + $ 2,160
Francine's child support income amount = $50,160
Less disregarded income amount − $39,295
Francine's excess income amount = $10,865
Peter's adjusted income amount ($34,884) minus 100% of Francine's excess income amount ($10,865) = $22,148. Peter has to pay Francine $7,686 being $24,019 by 32%.
1998/99 Assessment after proposed changes
Payer's adjusted income is reduced by the carer's excess income by 50 cents in the dollar
Peter has no children in his care. He is liable to pay Francine for 3 children aged 10, 13 and 17. Peter's 1996/97 taxable income was $42,000. Francine's 1996/97 taxable income was $48,000.
Peter's 1996/97 taxable income $42,000
Adjust by 4% inflation factor + $ 1,680
Peter's child support income amount = $43,680
Less exempted income amount − $ 9,947
Peter's adjusted income amount = $33,733
Multiply by child support percentage × 32%*1
(*1 Rate for 3 children)
Francine's 1996/97 taxable income $48,000
Adjust by 4% inflation factor + $ 1,920
Francine's child support income amount = $49,920
Less disregarded income amount − $30,347
Francine's excess income amount = $19,573
Peter's adjusted income amount ($33,733) minus 50% of Francine's excess income amount ($9,787) = $23,946. Peter has to pay Francine $7,663 being $23,946 by 32%
1.22 The proposed amendments will remove from the carer's disregarded income amount automatic allowances for child care costs for children under twelve years of age. [Item 5 - repeal section 46 and insert new section 46]
EXAMPLE
1997/98 Assessment prior to proposed changes
Carer's disregarded income including child care components
Peter has no children in his care. He is liable to pay Francine for 3 children aged 2, 8 and 10. Peter's 1995/96 taxable income was $42,000. Francine's 1995/96 taxable income was $35,000.
Peter's 1995/96 taxable income $42,000
Adjust by 4.5% inflation factor + $ 1,890
Peter's child support income amount = $43,890
Less exempted income amount − $ 9,006
Peter's adjusted income amount = $34,884
Multiply by child support percentage × 32%*1
Peter's child support annual rate = $11,163
(*1 Rate for 3 children)
Francine's 1995/96 taxable income $35,000
Adjust by 4.5% inflation factor + $ 1,575
Francine's child support income amount= $36,575
Less disregarded income amount − $45,470
Francine's excess income amount = $ 0.00
Peter's adjusted income amount ($34,884) minus 100% of Francine's excess income amount ($0) = $34,884. Peter has to pay Francine $11,163 being $34,884 by 32%.
1998/99 Assessment after proposed changes
Carer's disregarded income excluding child care components
Peter has no children in his care. He is liable to pay Francine for 3 children aged 2, 8 and 10. Peter's 1996/97 taxable income was $42,000. Francine's 1996/97 taxable income was $35,000.
Peter's 1996/97 taxable income $42,000
Adjust by 4% inflation factor + $ 1,680
Peter's child support income amount = $43,680
Less exempted income amount − $ 9,947
Peter's adjusted income amount = $33,733
Multiply by child support percentage × 32%*1
(*1 Rate for 3 children)
Francine's 1996/97 taxable income $35,000
Adjust by 4% inflation factor + $ 1,400
Francine's child support income amount= $36,400
Less disregarded income amount − $30,347
Francine's excess income amount = $ 6,053
Peter's adjusted income amount ($33,733) minus 50% of Francine's excess income amount ($3,027) = $30,706. Peter has to pay Francine $9,826 being $30,706 by 32%
1.23 The proposed amendments will provide for high child care costs to be a ground for departure from the administrative formula. [Items 9 and 10 - amend subsection 98C(2) to insert an additional ground of departure in item 117(2)(b)(i)]
1.24 A carer will be able to apply for a departure under this ground if that carer has incurred high child care costs. To qualify:
• the child care costs must be related to a child younger than 12
• the paying parent cannot be an eligible carer of any of the children in the care of the carer
• the total of the costs must be more than 5% of the carer's child support income for the child support year. [Item 11 - insert new subsections 117(3A) and (3B)]
1.25 The proposed amendments to the administrative formula require consequential amendments to update the examples in subsection 54(2). [Item 8 - repeal the examples in subsection 54(2) and insert new examples]
2.1 Schedule 2 of the Bill will amend the Child Support (Assessment) Act 1989 (the Assessment Act) to modify the requirement to disclose detailed information relating to children of a paying parent on the notice of assessment.
2.2 The proposed amendments will reduce the intrusion into the privacy of a paying parent in relation to information about their children from another relationship.
2.3 On the day on which the Act receives Royal Assent.
2.4 An allowance is made in calculating the child support payable under the administrative formula for the natural or adopted children of the paying parent who are from another relationship and are in the daily care of the paying parent. The amount of the allowance varies according to the age of the child. Disclosing information about any children of that relationship intrudes on the privacy of the paying parent.
2.5 The names and dates of birth of the children in the daily care of the paying parent are currently required to be shown on the notice of assessment in order to identify how the paying parent's exempted income was determined.
2.6 The proposed amendments will modify the disclosure requirements on the notice of assessment so that only the number of children in each age group will need to be shown. As the amount of child support payable under the administrative assessment varies depending on the age of a child, the number of children in each age group will continue to be required to be shown on the notice of assessment. [Item 1 - repeal paragraph 76(2)(d) and insert new paragraph 76(2)(d); Item 4 - insert new subsection 76(2A)]
2.7 Where parents share the care of a child, they may both be considered to be paying parents. Therefore the names and dates of birth of children in the daily care of the paying parent, in this case both parents, are required to be shown on the notice of assessment.
2.8 The proposed amendments will modify this requirement so that the information required to be shown on the notice of assessment will be confined to the number of children in each age group that have been taken into account in arriving at the amount of child support payable. [Item 2 - amend paragraph 76(2)(f)]
2.9 A carer who is not a parent of a child may receive child support from the parents of the child. The information on the notice of assessment provided to the non-paying carer will disclose the names and dates of birth of children of either or both parents.
2.10 The proposed amendments will ensure that information relating to the names and dates of birth of the children of either paying parent will not be disclosed to the carer. Instead only the number of children in each age group will be shown on the notice of assessment. [Item 3 - repeal subparagraph 76(2)(g)(iii) and insert new subparagraph 76(2)(g)(iii)]
3.1 Items 1 to 9 of Schedule 3 of the Bill will amend the Child Support (Assessment) Act 1989 (the Assessment Act) to provide for a $260 minimum annual rate of child support.
3.2 Item 10 of Schedule 3 of the Bill will amend the Child Support (Registration and Collection) Act 1988 (the Registration and Collection Act) to allow the Registrar to request the Secretary to the Department of Social Security (the Secretary) to make deductions from social security pensions or benefits to be applied towards child support liabilities.
3.3 Item 11 of Schedule 3 of the Bill will amend the Social Security Act 1991 to enable deductions to be made from social security pensions and benefits where requested by written notice from the Registrar.
3.4 The purpose of the amendments is to strengthen the objective of the Child Support Scheme that parents share in the cost of supporting their children according to their capacity. The amendments will:
• ensure that paying parents subject to an administrative assessment have a total minimum annual rate of child support payable of $260
• ensure where there is more than one carer entitled to receive child support from the paying parent the minimum total amount of $260 will be apportioned amongst the carers according to the number of children in their care
• discourage parents from avoiding their child support responsibilities through voluntary unemployment
• provide a method to readily collect the minimum liability (or arrears) by making deductions from social security pensions or benefits.
3.5 The proposed amendments will also enable the Secretary to:
• comply with a notice from the Registrar instructing deductions be made from a person's social security pension or benefit
• forward the amounts deducted to the Commissioner of Taxation (who receives the amounts in the capacity of the Registrar).
3.6 Items 1 to 9 of Schedule 3 will commence on the day on which the Act receives Royal Assent and will not apply in relation to the 1997-98 child support year or any earlier child support year.
3.7 Item 10 of Schedule 3 will commence on the 1 July 1998.
3.8 Item 11 of Schedule 3 will commence on the 1 July 1998.
3.9 The amount of child support payable under an administrative assessment is based on an annual rate calculated by applying the child support formula (the formula) under the Assessment Act. Currently, the formula may result in either:
• the paying parent having a liability of $260 or more, or
• a liability of nil.
3.10 In situations where the amount of the child support liability is less than $260 but not nil, section 66 of the Assessment Act operates so that it is deemed to be nil.
3.11 Using the formula a liability may initially be for less than $260 where:
• a paying parent has a low child support income
• the carer's income reduces the amount the paying parent is required to pay
• parents share care of a child covered by an administrative assessment and the annual rate of one parent is reduced by the annual rate of the other parent.
3.12 Some paying parents with low child support liabilities receive social security pensions or benefits. Where a paying parent has a child support liability or arrears, deductions cannot be made from any social security pensions or benefits made to the paying parent under the Social Security Act 1991.
3.13 The Joint Committee received submissions from the community suggesting that parents pay a minimum amount of child support irrespective of their financial circumstances. The Joint Committee agreed with the submissions and proposed in Recommendation 122 that paying parents be required to pay a minimum of $260 which the Registrar could waive in special circumstances.
3.14 The proposed amendments will give effect to the recommendation of the Joint Committee to require a minimum child support payment of $260 per annum.
3.15 The Registrar will not be able to waive the minimum liability of $260. Instead paying parents will be able to apply to the Registrar to have the minimum amount reduced to nil where they have income less than $260.
3.16 The proposed amendment will allow the Registrar to collect child support liabilities from paying parents social security pensions or benefits.
3.17 Where parents have low taxable income a liability to pay child support may not arise under the child support formula.
3.18 The proposed amendments will modify the formula so that where an administrative assessment results in an annual rate of nil to $259 then the annual rate will be increased to $260. The minimum liability will be a minimum total amount payable by the liable parent and not a minimum amount for each child. Any liabilities arising from any type of shared care arrangements, agreements or court ordered departures will not be taken into account in working out whether a person's total annual rate is more than $260. This will mean that in these situations a paying parent may pay a total of more than the minimum of $260. [Item 4 - Repeal section 66 and insert new subsection 66(1) and (2)]
3.19 A paying parent subject to the minimum $260 liability will have a total annual rate of $260. Where there is more than one carer entitled to receive child support from the paying parent the minimum amount of $260 will be apportioned amongst the carers according to the number of children in their care. Regulations will prescribe the method of apportionment in different circumstances. [Item 4 - insert new subsection 66(3)]
3.20 Subdivision B provides for paying parents with low child support income to not pay child support. This subdivision must be repealed as a consequence of the introduction of a minimum liability of $260. [Item 1 - repeal Subdivision B of Division 2 of Part 5]
3.21 References to section 41 will need to be removed from the Assessment Act. [Item 3 - amend section 59 (sub-subparagraph (b)(i)(C) of the definition of "income amount order"); Item 7 - repeal subparagraph 98D(1)(f)(i); Item 9 - repeal subparagraph 118(1)(f)(i)]
3.22 References to Subdivision B in other sections of the Assessment Act need to be removed. [Item 2 - amend paragraph 48(a) and section 51]
3.23 Where parents share in the care of a child or children then, for the purposes of the child support formula, they are both taken to have a liability in respect of those children. The child support liability of one parent is offset against that of the other so that in most cases only one parent has a net liability.
3.24 The proposed amendments will not apply to increase the amount of the child support liability of either parent whether before or after the offset of liabilities to a minimum liability of $260. This is because parents who share in the care of their children are already considered to be contributing to the financial support of those children. This may mean that parents in this situation may pay less than the minimum liability of $260. [Item 4 - insert new subsection 66B(1)]
3.25 Where the paying parent has a child support liability under a court ordered departure or an agreement then the minimum annual amount of $260 will not apply to that liability. This may mean that parents in this situation may pay less than the minimum liability of $260. [Item 4 - insert new subsection 66B(2)]
3.26 The proposed amendments will allow a paying parent to apply to the Registrar to have the minimum annual rate of $260 reduced to nil. [Item 4 - insert new subsection 66A(1)]
3.27 The only basis on which the Registrar will be able to reduce a minimum liability to nil is where the paying parent's income will be less than $260 for the child support year to which the application relates. Regulations will outline the formal requirements of the application. [Item 4 - insert new subsection 66A(2)]
3.28 The proposed amendments prescribe a definition of "income" for the purposes of an application to the Registrar. This will include any money earned, derived or received by the person for their own use or benefit. [Item 4 - insert new subsection 66A(4)]
3.29 Where the Registrar reduces the minimum liability to nil, that nil rate applies for that child support year only. [Item 4 - insert new subsection 66A(3)]
3.30 The Registrar's power under the Assessment Act to reduce the liability will be limited to circumstances where an application is made under the proposed subsection 66A(1). When making a departure determination under Part 6A of the Assessment Act, the Registrar will not be able to reduce a minimum liability to a rate less than $260. However, where a parent applies to the Registrar for a determination seeking to increase the minimum liability the current departure provisions will apply. [Item 5 - insert new subsection 98A(3); Item 6 - amend subsection 98D(1)]
3.31 The paying parent will have the right to apply to a court having jurisdiction under the Assessment Act to have the minimum liability varied. The court will take into account the special circumstances of the paying parent, the carer and the children. [Item 8 - insert new paragraph 115(d)]
3.32 The proposed amendment to the Registration and Collection Act will allow deductions to be made from social security pensions and benefits.
3.33 Where a person is receiving a social security pension or benefit and has a child support liability (or arrears of child support), the Registrar will be able to give a notice to the Secretary instructing that periodic deductions be made from a paying parent's pension or benefit.
3.34 The notice will allow collection where the person paying child support has an ongoing liability to pay child support under the Assessment Act. [Item 10 - insert new subsection 72AA(1)]
3.35 The notice will also allow collection where the person paying child support has an unpaid debt under the Registration and Collection Act but does not extend to collection of unpaid partner maintenance. [Item 10 - insert new subsections 72AA(2) and (4)]
3.36 The notice is to be in writing and contain sufficient information to identify the person with the arrears or liability. It may be given by electronic transmission or any other means. [Item 10 - insert new subsection 72AA (3)]
3.37 The Secretary will be required to make the deductions and forward the amounts to the Commissioner of Taxation. Any amounts paid to the Commissioner under this provision will be taken to be received in his or her capacity as the Registrar. [Item 10 - insert new subsection 72AA(5)]
3.38 References to social security pensions and benefits have the same meaning as in the Social Security Act 1991. [Item 10 - insert subsection 72AA(6)]
3.39 The amount which can be deducted will be prescribed in the Child Support (Registration and Collection) Regulations.
3.40 The proposed amendments to the Registration and Collection Act require consequential amendments to the Social Security Act 1991 to enable the Secretary to comply with such a notice. [Item 11 - insert new subsection 1359(2) and replace heading to section 1359]
4.1 Schedule 4 of the Bill will amend the Child Support (Registration and Collection) Act 1988 (the Registration and Collection Act) to:
• allow parties to move to private collection by agreement at any time
• require parties to move to private collection in certain circumstances where the Registrar is satisfied that regular payments would be likely to continue.
4.2 The proposed amendments will require parties to take greater responsibility for their child support arrangements while also providing for a safeguard in the event that the private arrangements breakdown.
4.3 On 1 July 1998.
4.4 Currently, the payee of a registered maintenance liability has the option of advising the Registrar that they no longer require enforcement of the liability by the Registrar. A payee has the option to apply for the liability to again become enforceable by the Registrar and also request the collection of certain arrears.
4.5 The payee is the only party who can elect for collection to be changed to private collection. If the payee is not in receipt of a social security payment, this decision can be made at any time but not more than twice in a five year period. A payee who is in receipt of a social security payment can only elect to change to private collection where the payer has established a good payment record.
4.6 The Joint Committee considered that a large proportion of parents who voluntarily pay child support to the Registrar on time could be safely moved from collection by the Registrar. The Joint Committee's Recommendations 69 and 70 dealt with this matter.
4.7 The proposed amendments address Recommendations 69 and 70 of the Joint Committee.
4.8 Under the proposed amendments any payee of an enforceable maintenance liability will be able to undertake private collection at any time. There will no longer be a requirement for the payer to have a satisfactory payment record before a payee receiving a social security payment can elect to undertake private collection. There will also no longer be a limit placed on the number of times that the payee can undertake private collection. [Item 4 - repeal section 38, insert new section 38 and subsections 38A(1) to (3); Items 5, 6 and 7 - amend new subsections 39A(2), (3) and (7)]
4.9 Where:
• a court ordered liability has been registered with the Registrar for collection
• there is no provision in the order for reducing the liability due to reduced income, and
• a payer is in receipt of a social security pension or benefit
a payer may apply under the Registration and Collection Act for the liability to no longer be enforced by the Registrar. This is called a "low-income non-enforcement period". If the Registrar accepts such an application then enforcement is suspended. Where a low-income non-enforcement period is in place a payee will not be able to elect to undertake private collection. [Item 4 - insert new subsection 38A(4)].
4.10 The Registrar will allow parties to move to private collection by agreement at any time by making a joint election. [Item 4 - repeal section 38, insert new section 38 and subsections 38A(1) to (3); Items 5, 6 and 7 - amend new subsections 39A(2), (3) and (7)]
4.11 The parties will not be able to elect to undertake private collection if a low-income non-enforcement period is in place. (Refer to paragraph 4.9) [Item 4 - insert new subsection 38A(4)]
4.12 The proposed amendments will provide the Registrar with the power to require payees and payers to undertake private collection once a satisfactory payment record of six months has been established and the Registrar is satisfied that the payer is likely to continue to make timely payments. The Registrar will not require private collection where the payer has an unsatisfactory payment record, there is a low-income non-enforcement period in place or where such private collection is considered inappropriate. The Child Support (Registration and Collection) Act will prescribe a satisfactory payment record for this purpose. [Item 4 - insert new subsection 38B(1); Items 5, 6 and 7 - amend new subsections 39A(2), (3) and (7)]
4.13 The Registrar must vary the particulars in the Register to reflect this decision to move parties to private collection. The Registrar will select a day from which the decision will take effect being a day not earlier than 28 days after the day on which the Registrar makes the decision. This minimum period has been set to give parties sufficient time within which to organise their affairs for private payment or dispute the decision of the Registrar. The liability will cease to be enforceable by the Registrar after this day. [Item 4 - insert subsection 38B(2)]
4.14 As the Registrar's decision to require parties to undertake private collection will require a variation to the Register, either party will be able to lodge an objection under section 83 of the Registration and Collection Act.
4.15 The Registrar will have the power to revoke the decision prior to the date the decision is to take effect. [Item 4 - insert subsections 38B(3)and(4)]
4.16 The payee may apply for the liability to again become enforceable by the Registrar, where the payer defaults or in other special circumstances. In the absence of such an application which may only be made by a payee, the liability will remain non-enforceable by the Registrar. A payee who has elected for private collection under section 38A or was required to undertake private collection by the Registrar under section 38B will be able to apply to the Registrar for the liability to again become enforceable in limited circumstances. [Item 4 - insert subsections 39(1) and (2)]
4.17 An application may not be made to the Registrar where a low-income non-enforcement period is in place in relation to the liability. (Refer to paragraph 4.9) [Item 2 - amend paragraph 33(1)(b); Item 3 - amend subsections 37B(6) and(7); Item 4 - insert subsections 39(3)]
Decision by Registrar
4.18 The Registrar must grant or refuse the application to make the liability enforceable again within 28 days after receiving the application. The Registrar must grant the application if the payer is considered to have an unsatisfactory payment record or if the Registrar is satisfied that special circumstances exist making it appropriate to grant the application. If the Registrar refuses an application the payee will have the right to object under section 85 of the Registration and Collection Act. [Item 1 - amend paragraph (b) of the definition of "appealable refusal decision" in subsection 4(1); Item 4 - insert new subsections 39(4)and(5)]
4.19 Where the Registrar grants an application, he must make the necessary variations to the Register to enable the liability to again become enforceable. Where a payee has made an application, the Registrar must not make a variation to the Register where a low-income non-enforcement period under section 37B is in place in relation to the liability. [Item 4 - insert new subsections 39(6)and(7)]
4.20 Any elections made under section 38 or any applications made under section 39 which are received prior to the commencement date of Schedule 4 will be dealt with by the Registrar in accordance with the law applicable prior to the commencement of the Schedule.
5.1 Schedule 5 of the Bill will amend the Child Support (Assessment) Act 1989 (the Assessment Act) to modify the effect of care arrangements on assessments as follows:
• Item 1 of Schedule 5 - to include a step child as a relevant dependent child where the paying parent has a legal duty to maintain the child, under section 66M of the Family Law Act 1975 or section 58D of the Family Court Act 1975 of Western Australia. (Step-child)
• Items 2 to 5 of Schedule 5 - to reflect parents' agreement about care arrangements for their children. (Major/substantial care)
• Items 6 to 7 of Schedule 5 - to reflect both the factual and lawful daily care of a child. (Factual/lawful care)
5.2 The proposed amendments extend the definition of a relevant dependent child to include a step-child where a court has made an order under section 66M of the Family Law Act 1975 or section 58D of the Family Court Act 1975 of Western Australia. The amendments eliminate the requirement for a paying parent to seek a departure from an assessment and enable a legal duty to maintain a step-child to be taken into account for the purposes of the child support formula.
5.3 The proposed amendments will enable the Registrar to accept parents' agreement that substantial contact applies to modify an administrative assessment even if the care is less than 30% to 40% of the nights in a child support year.
5.4 The proposed amendments will address concerns that an assessment may not reflect lawful care arrangements by providing that administrative assessments will be based on both the lawful daily care of the child (as provided for in a court order or registered parenting plan) and on the actual care of the child.
5.5 The proposed amendments will require the Registrar to give effect to the lawful care arrangements in relation to a child when determining both a person's level of care and the appropriate rate of child support payable by a person.
5.6 On the day on which the Act receives Royal Assent and will not apply in relation to the 1997-98 child support year or any earlier child support year.
5.7 Division 1 of Part 5 provides the components that apply in the basic child support formula. One component is the exempted income of the paying parent which includes an allowance for a relevant dependent child (namely a natural or adopted child) of the paying parent.
5.8 Division 2 of Part 5 of the Assessment Act provides for a number of modifications to the basic formula in certain cases. Subdivision E in that Part provides for modified rules for children where care is shared or divided between parents.
5.9 Where care is shared or divided between parents they are both taken to be paying parents and eligible carers in respect of those children. An allowance is made in calculating the child support payable under the administrative formula according to the level of care each parent has in relation to the child or children.
Care of Step-child
5.10 Currently a paying parent may claim only natural or adopted children as relevant dependent children for the purposes of the child support assessment formula. A paying parent may have a legal duty, determined by the court, to maintain a step-child. A paying parent is required to seek a departure from an assessment in order to have this legal duty taken into account in the formula.
5.11 Substantial contact is based on the number of nights that a parent has care of a child over a child support year. In order to qualify for substantial contact a parent must have the care of a child between 30% and 40% of the nights in a child support year. By requiring substantial contact to be established on the basis of nights there are some care arrangements which the Registrar is unable to give effect to regardless of any agreement between the parents.
5.12 The current law is unclear whether assessments should be based solely on the factual daily care of a child or whether that care should also be lawful. The legislation does not specifically require care of a child to be lawful in order for an administrative assessment to be raised based on the level of care as disclosed in the application.
5.13 The level of care taken into account for the purposes of varying the level of care in an assessment is based on the arrangements as disclosed to the Registrar by one of the parties when the level of care of the child changes. The assessed rate of child support is based on the factual care of the child. In some circumstances this may be contrary to the care arrangements a court has ordered or that are contained within a registered parenting plan.
5.14 The definition of relevant dependent child in section 5 of the Assessment Act will be amended to include a step-child where:
• an order is in force under section 66M of the Family Law Act 1975 in relation to the parent and the step-child; or
• the parent has the duty under section 58D of the Family Court Act 1975 of Western Australia of maintaining the step-child.
5.15 To be a relevant dependent child, the step-child must also be under the age of 18 and not a member of a couple. The paying parent must have sole or major contact with the step-child. Shared care of a step-child does not and will not fall within the definition of a relevant dependent child. The term major contact is defined in the Assessment Act as being a person who has care of the child for 65% of the nights. [Item 1 - repeal definition of "relevant dependent child" in section 5 and insert new definition of "relevant dependent child"]
5.16 The proposed amendments will allow parents to agree that a parent, other than the principal provider of ongoing daily care, has substantial contact with a child and to have this care arrangement reflected in their administrative assessment.
5.17 The proposed amendments will provide that where parents are in agreement the Registrar will not be required to assess the level of care. Where parents agree, factors other than nights may be taken into account in determining substantial contact. [Item 2 - amend definition of "child support percentage"; Item 3 - amend definition of "major contact"; Item 4 - amend definition of "substantial contact"; Item 6 - repeal paragraph 8(3)(b) and insert new paragraph 8(3)(b)]
5.18 The proposed amendments will apply to modify how a person's level of care is calculated where the Registrar is notified or becomes aware that a person, without "reasonable excuse", has contravened a court order or registered parenting plan that deals with the care or contact of a child. The circumstances that will be covered by the term "reasonable excuse" will be prescribed in Regulations. [Item 5 - insert subsection 8(1A); Item 7 - insert paragraph 8A(1)(c)]
5.19 For the purposes of the modified formula, a person who has more care than is provided for in a court order or registered parenting plan will be taken to have care only to the level specified in the order or parenting plan. The person who has less care as a result of the contravention will be taken to have care only to the level of their actual care of the child. [Item 7 - insert new subsection 8A(2) and (3)]
5.20 The kind of care each person has will be based on the amount of time they actually have the child in their care, or limited by the amount of time they could lawfully have the child in their care. A person who is taken to have shared care, substantial or major contact with a child cannot also be taken to be the sole or principal provider of ongoing daily care of the child. This is so even though the child may not actually be in the care of any other person. [Item 7 - insert new subsection 8A(3), (4), (5) and (6)]
EXAMPLE
A court order in place in relation to Jenny provides that during the year Jenny is to live with Kim for 182 days and Jo for 183 days. This means Kim and Jo have lawful care amounting to shared care. The court order has been contravened so that Jenny lives with Kim for 120 days, (which amounts to substantial contact) and Jenny lives with Jo for 245 days (which amounts to major contact). Jo applies for an administrative assessment of child support. Jo is taken to have only the care provided for in the court order, namely shared care. Kim's care is worked out on the basis of Kim's actual care, namely substantial contact.
5.21 The proposed amendments will only apply where there is a court order or registered parenting plan in force that deals with the person or persons with whom the child is to live or have contact. If there is no court order or registered parenting plan in force care will be based on the factual care of the child.
5.22 The terms "court order" and "registered parenting plan" for the purposes of the new provision are defined. [Item 7 - insert definition of "court order" and "registered parenting plan" in section 8A(7)]
5.23 The proposed amendments will modify how a parent's entitlement to child support is calculated. Each parent will only be entitled to receive child support to the extent of their lawful level of care. A parent's actual level of care will reduce their entitlement under a court order, where it is less than their lawful level of care. Where both parents are eligible carers the liability of one to the other will continue to be calculated under Subdivision E of Part 5. Where due to the contravention of a court order, one parent is no longer an eligible carer, then the liability will be calculated under the new Subdivision H of Part 5 so that they will be liable to pay child support to the other parent only to the extent of that parent's lawful care. [Item 8 - insert new Subdivision H to deal with parents whose care is modified by effect of court order/parenting plan]
6.1 Schedule 6 of the Bill will amend the Child Support (Assessment) Act 1989 (the Assessment Act) so that the start date of liability for applications for administrative assessment will be the date the application is made to the Registrar.
6.2 The purpose of the amendments is to reduce arrears caused by backdating the start date of liability under an administrative assessment to a date prior to the day an application was made to the Registrar.
6.3 On the day on which the Act receives Royal Assent and will not apply to applications for administrative assessment made before 1 July 1998.
6.4 Currently, where an application for administrative assessment is accepted by the Registrar under the Assessment Act the start date of the liability is determined by reference to one of three possible dates. This may be up to 28 days prior to the application having been made and can result in the paying parent having arrears of child support before they are notified of an assessment having been made.
6.5 The Joint Committee was concerned that the existing provisions which determine the start date of liability create substantial arrears, often before a paying parent is notified of their liability. The Joint Committee in Recommendation 43 proposed that the start date of liability be the day after the day on which an appeal under section 107 of the Assessment Act expires.
6.6 The proposed amendment partially addresses Recommendation 43 and will provide that the start date of a liability under a child support assessment be the date the application is made to the Registrar. [Item 1 - repeal paragraph 31(1)(d)(i) and insert new paragraph 31(1)(d)(i)]
7.1 Schedule 7 of the Bill will amend the Child Support (Assessment) Act 1989 (the Assessment Act) to allow a person in receipt of more than the minimum rate of Family Allowance to elect to end their administrative assessment where approval has been granted by the Secretary to the Department of Social Security (the Secretary).
7.2 The purpose of the amendment is to ensure consistent treatment of clients who are determined to be at personal risk.
7.3 On 1 July 1998.
7.4 Section 252 of the Social Security Act 1991 requires social security recipients to take reasonable action to obtain maintenance. The Secretary may, based on a risk assessment, grant an exemption to a carer from applying for a child support assessment.
7.5 Section 151 of the Assessment Act allows a carer to end an administrative assessment of child support. This provision excludes those carers in receipt of an income tested pension, allowance or benefit. If an assessment is already in place the Registrar cannot end the liability even where the client is at risk.
7.6 The Joint Committee proposed Recommendation 17 to address this problem by providing that the Registrar have a discretion to suspend enforcement action where satisfied that the collection of child support is contributing to risk within the family.
7.7 The proposed amendment will satisfy the recommendation of the Joint Committee.
7.8 The proposed amendment will allow a carer in receipt of more than the minimum rate of Family Allowance to elect to end their administrative assessment where a risk assessment has been made by the Secretary. [Item 1 - repeal subsection 151(4), insert new subsection 151(4); Item 2 - insert section 151A]
7.9 The proposed amendment also requires a consequential amendment to the Social Security Act 1991 to include adverse decisions of the Secretary in relation to the new subsection 151A(2) of the Assessment Act. [Item 3 - amend paragraph 1239(1)(b)]
8.1 Schedule 8 of the Bill will amend the Child Support (Assessment) Act 1989 (the Assessment Act) and the Child Support (Registration and Collection) Act 1988 (the Registration and Collection Act) to enable a carer to apply for a child support assessment to continue to the end of the school year in which a full-time secondary student turns 18.
8.2 The proposed amendments will enable a carer to apply for a child support assessment to continue to the end of the school year in which a full-time secondary student turns 18.
8.3 On the day on which the Act receives Royal Assent and will not apply in relation to the 1997-98 child support year or any earlier child support year. The amendments to the Registration and Collection Act will commence on 1 July 1998.
8.4 A child turning 18 is a terminating event in relation to eligibility for child support under a child support administrative assessment or child support agreement. Under the Registration and Collection Act, a child attaining the age of 18 is a terminating event in relation to an enforceable maintenance liability.
8.5 A carer entitled to child support may apply for an administrative assessment or a child support agreement to remain in force until the last day of the secondary school year in which an eligible child, who is a full-time secondary student, turns 18. This will only apply in relation to the school year in which the child turns 18 regardless of whether it is the final year of school and only for that year. If the application is for an agreement to continue, both the carer and the paying parent will need to sign the application. [Item 5 - insert section 151B]
8.6 An application must be made to the Registrar prior to the child turning 18, although the Registrar will have a limited discretion to accept an application after the child's 18th birthday if satisfied that there are exceptional circumstances. Where the Registrar accepts an application, the Registrar must notify the applicant (the carer) and the paying parent in writing. Both parties will have objection and appeal rights in relation to the particulars of the assessment. [Item 5 - insert section 151C]
8.7 If the Registrar accepts an application, the continuation of the assessment or agreement takes effect from the day before the child's 18th birthday and the child's 18th birthday is no longer a terminating event. [Item 5 - insert section 151D; Item 4 - insert note in subsection 12(1)]
8.8 Under the Registration and Collection Act, a child turning 18 is generally a terminating event. The definition of terminating event has been changed to reflect that a terminating event in relation to a child does not occur on the child's 18th birthday if the Registrar has accepted an application for the continuation of an assessment or agreement. The terminating event becomes the last day of the secondary school year in which the child turns 18. [Items 6 - repeal subsection 4(1) (subparagraph (c)(i) of the definition of terminating event) and insert new subsection 4(1) (subparagraph (c)(i) of the definition of terminating event); Item 7 - insert new subsection 4(1) (after paragraph (c) of the definition of terminating event, as paragraph (ca)); Item 8 - add note at end of subsection 34(1)]
8.9 The terms "full-time secondary education", "last day" and "secondary school" have been defined. [Items 1 - insert definition of "full-time secondary education" in section 5; Item 2 - insert definition of "last day" in section 5; Item 3 - insert definition of "secondary school" in section 5]
9.1 Schedule 9 of the Bill will amend the notification requirements contained in the Child Support (Assessment) Act 1989 (the Assessment Act) and the Child Support (Registration and Collection) Act 1988 (the Registration and Collection Act).
9.2 Part 1 of Schedule 9 of the Bill will amend the Assessment Act to modify the date of effect of information provided to or obtained by the Registrar.
9.3 Part 2 of Schedule 9 of the Bill will amend the Assessment Act and the Registration and Collection Act to modify the manner in which information must be provided to the Registrar.
9.4 The proposed amendments will make variations to a person's child support liability brought about by a change of circumstances, effective only from the date the Registrar is notified of the change.
9.5 The proposed amendments will enable the Registrar to specify the manner in which different information is required to be provided, including verbally or by electronic means.
9.6 On the day on which the Act receives Royal Assent and will not apply in relation to the 1997-98 child support year or any earlier child support year. The amendments to the Registration and Collection Act will commence on 1 July 1998.
9.7 The Registrar regularly receives information regarding changes in the circumstances of parties to an administrative assessment. This information often results in an amendment to the child support assessment being back dated to the time that the change in circumstances took place. This can result in overpayments to carers, causing financial hardship.
9.8 The Registrar currently requires most information to be supplied on approved forms.
9.9 In working out a paying parent's child support liability, an allowance is given for a relevant dependent child of the paying parent.
9.10 The proposed amendments will mean that where a paying parent notifies the Registrar that they have a relevant dependent child the person's child support assessment will be amended to include that child from the date of notification to the Registrar. [Item 1 - insert new subsections 39(3)(a), (b), (e)]
9.11 There are two exceptions to the general rule. The Registrar will backdate the effect of notification of a relevant dependent child by up to 28 days where there has been notification within 28 days of the:
l child becoming a relevant dependent child [Item 1 - insert new paragraph 39(3)(c)]
l paying parent receiving a notice of assessment in which the relevant dependent child has not been provided for. [Item 1 - insert new paragraph 39(3)(d)]
9.12 A paying parent will be taken to cease to have a relevant dependent child from the day that the child ceases to be dependent on the paying parent. This will apply regardless of when the Registrar is notified of that fact. [Item 1 - insert new subsection 39(4)]
Notification of change in level of care
9.13 The proposed amendments will mean that, where a parent notifies the Registrar of a change in the amount of time each parent has care of the child the amended assessment will have effect only from the date the Registrar is notified of the change. [Item 2 - insert new section 74A]
9.14 The Registrar will no longer be required to collect information through a series of approved forms under either the Assessment Act [Item 3 - repeal section 11] or the Registration and Collection Act. [Item 20 - repeal subsection 4(2)]
9.15 The proposed amendments will enable the Registrar to specify the manner in which information will be provided under both the Assessment Act and the Registration and Collection Act. A new subsection will be inserted into the Assessment Act [Item 17 - insert new section 150A] and into the Registration and Collection Act [Item 21 - insert new section 16A] which will enable the Registrar to specify certain things, including:
• the information to be provided
• that the information be provided in a particular form
• that the information may be provided orally
• that the information may be provided electronically.
9.16 Consequential amendments are required to all sections which contain different rules about information being provided to the Registrar. These are to be replaced with one general rule allowing the Registrar to specify the manner in which the information is required to be provided.
9.17 Amendments are required to the Assessment Act. [Item 4 - repeal section 27, insert new section 27; Item 6 - repeal subsection 32(2) and 32(3), insert new subsection 32(2); Item 7 - amend subsection 32(4): Item 9 - repeal subsection 60(2), insert new subsection 60(2); Item 11 - repeal subsection 62(2), insert new subsection 62(2); Item 12 - repeal subsection 89(1), (2) and (3), insert new subsection 89(1); Item 13 - amend subsection 89(4); Item 14 - amend subsection 128(2); Item 15 - amend paragraph 128(4)(a); Item 19 - repeal subsection 151(2) and (3), insert new subsection 151(2).
9.18 Amendments are required to the Registration and Collection Act. [Item 22 - amend subsection 23(2); Item 23 - repeal subsection 23(3), insert new subsection 23(3); Item 24 - amend subsection 23(5); Item 25 - amend subsection 23(6); Item 26 - insert new subsection 23(6A); Item 27 - amend subsection 24(1); Item 28 - amend subsection 24(1); Item 29 repeal subsection 24(2), insert new subsection 24(2); Item 30 - amend subsection 25(1); Item 32 - repeal subsection 25(2) and (3), insert new subsections 25(2) and (3); Item 33 - amend subsection 28A(3); Item 35 - repeal section 32, insert new section 32; Item 36 - amend subsection 33(1); Item 38 - amend 33(3); Item 39 - amend subsection 34(1); Item 41 - amend subsection 35(1) and (2); Item 43 - repeal section 36, insert new section 36; Item 44 - amend section 37; Item 45 - amend subsection 37B(2); Item 47 - amend subsection 39A(4); Item 49 - amend subsection 39B(3); Item 51 - amend subsection 39B(5); Item 52 - amend subsection 44(3); Item 54 - repeal paragraph 47(1)(b), insert new paragraph 47(1)(b); Item 56 - amend subsection 47(1A); Item 57 - amend subsection 47(3); Item 58 - amend subsection 71(b); Item 59 - insert 71(2); Item 60 - amend subsection 71A(b); Item 62 - amend subsection 111(1); Item 64 - amend subsection 111(2)]
9.19 Provisions of the Assessment Act, which expressly include the requirement to provide information in writing, will be amended to bring them in line with the general rule allowing the Registrar to specify the manner in which the information is required to be provided. [Item 5 - amend subsection 32(1); Item 7 - amend subsection 32(4); Item 8 - amend subsection 60(1); Item 10 - amend subsection 62(1A); Item 18 - amend subsection 151(1)]
9.20 A series of notes will be inserted into the Assessment Act to inform readers of the requirements. [Item 16 - insert note after subsection 128(4)]
9.21 A series of notes will be inserted into the Registration and Collection Act to inform readers of the requirements. [Item 31 - insert note after subsection 25(1); Item 34 - insert note after subsection 28A(3); Item 37 - insert note after subsection 33(1); Item 40 - insert note after subsection 34(1); Item 42 - insert note after subsection 35(2); Item 46 - insert note after subsection 37B(2); Item 48 - insert note after subsection 39A(4); Item 50 - insert note after subsection 39B(3); Item 53 - insert note after subsection 44(3); Item 55 - insert note after subsection 47(1); Item 61 - insert note after subsection 71A; Item 63 - insert note after subsection 111(1)]
10.1 Schedule 10 of the Bill will amend the Child Support (Registration and Collection) Act 1988 (the Registration and Collection Act) to allow the Registrar to hold money collected from a payer. This money will be held only in those cases where a payer has applied to the Family Court for a declaration that they are not a person from whom child support should be sought.
10.2 The proposed amendment will assist in reducing the incidence of overpayments to persons receiving child support.
10.3 On 1 July 1998.
10.4 The Registrar has an obligation to collect and disburse money under the Registration and Collection Act, once an administrative assessment has been raised under the Assessment Act.
10.5 Section 107 of the Assessment Act allows a payer to seek a declaration from the Family Court that the applicant was not entitled to an administrative assessment of child support. The most common grounds which a payer may put forward are that:
l they were not a parent of the child
l the person seeking child support was not entitled to child support; or
l child was not eligible to receive child support.
Should the Court be satisfied on one of these grounds and make that declaration, the application for an administrative assessment is to be taken never to have been accepted by the Registrar.
10.6 The Joint Committee proposed Recommendation 47 to deal with the problem of the Registrar being required to collect and pay child support despite the application by a person under section 107.
10.7 The proposed amendment will satisfy the recommendation of the Joint Committee.
10.8 The amendment will allow the Registrar to decide to suspend payments to a person entitled to receive child support until the Court makes a final decision on an application under section 107. The person required to pay child support will continue to be required to make payments to the Registrar but payments will be held in the Child Support Reserve and not paid out. [Item 1 - amend subsection 76(1); Item 2 - insert section 79A(1)]
10.9 A decision will have effect until the Registrar makes a further determination to resume the entitlement to payment of money collected to the person entitled to receive child support. [Item 2 - insert section 79A(2) and (4)]
10.10 The Registrar must notify the payee of either the determination to suspend or resume. [Item 2 - insert subsection 79A(3) and 79A(4)]
11.1 Schedule 11 of the Bill amends the Child Support (Registration and Collection) Act 1988 (the Registration and Collection Act) to allow for debts between two persons who owe child support in respect of their children to be offset.
11.2 The proposed amendments will provide for the parties to an assessment who each have a child support debt to the Commonwealth in regard to a common child, to have the amounts owed offset so that they are only required to pay the net amount to the Registrar.
11.3 On 1 July 1998.
11.4 Where two persons each have a child support debt to the Commonwealth, each person is required to pay the full amount of their individual debt. One person's debt cannot be offset against the other person's debt to arrive at a net amount payable.
11.5 A new section will be inserted so that where two persons owe money for child support, then the amount each person owes in relation to the other person may be offset against each other by the Registrar. [Item 1 - insert subsection 71AA(1)]
11.6 The proposed amendment will provide that where a person has a debt equal to the amount of the other person's debt, then the amount of the debts may be completely offset. The Registrar will have a discretion to take into account the circumstances of the individual case when considering whether to offset the debts and how much may be offset. [Item 1 - insert subsection 71AA(1) & (2)]
11.7 Where the debts are not equal, the amendment will allow the person with the greater debt to have their debt reduced by up to the amount of the smaller debt. The amount of the smaller debt may be reduced by the amount that is offset against the larger debt. It is possible that the smaller debt may be totally offset. [Item 1 - insert subsection 71AA(3)]
11.8 Amounts that are offset will be taken to have been received by the Commonwealth. Additionally, any amounts offset will be taken to have been paid by the payer to the Registrar and paid by the Commonwealth to the payee. [Item 1 - insert subsection 71AA(4)].
11.9 Where a person has had all or part of their debt offset against another debt and the other debt is later reduced, the person will be required to repay to the Commonwealth the amount (if any) that they have been overpaid. [Item 2 - repeal subsection 79(1) and insert new subsection 79(1)]
12.1 Schedule 12 of the Bill will amend the Child Support (Assessment) Act 1989 (the Assessment Act) to allow clients to object to decisions made by the Registrar.
12.2 The proposed amendments will bring the Assessment Act into line with general Commonwealth administrative review practice and allow either parent to seek an internal review of all decisions made by the Registrar.
12.3 Immediately after the commencement of the "Departure from Administrative Assessment" amendments in Schedule 13 and will not apply in relation to the 1997-98 child support year or any earlier child support year.
12.4 The only avenue to challenge the following decisions made by the Registrar under the Assessment Act is through the Family Court (which may be costly and time consuming):
• acceptance or refusal to accept an application for administrative assessment
• acceptance or refusal to accept an application for acceptance of a child support agreement
• the particulars of an assessment made
• review of decisions of the Registrar made under Part 6A (Departures from Administrative Assessments).
12.5 The Joint Committee raised concerns about the lack of internal review provisions in the Assessment Act and proposed Recommendations 76 to 84 to address this problem.
12.6 The proposed amendments will address Recommendations 76 to 84 of the Joint Committee and create the right of parties to object to decisions of the Registrar. As a general rule parties will be unable to go to court without first making an objection to the Registrar and the Registrar has disallowed or allowed the objection in part.
12.7 The amendments specifically provide for:
• what decisions will be subject to objection and who can lodge an objection
• when an objection can be made
• how an objection can be lodged and how the Registrar is to consider an objection and advise the parties
• what appeal rights exist after a decision on an objection by the Registrar.
[Item 1 - insert new Part 6B; Item 2 - amend section 5 to include a definition of the term "AAT"]
12.8 The proposed amendments will allow parties or a party to a decision to object to the following decisions of the Registrar:
• to accept or refuse to accept an application for administrative assessment
• any variations to the particulars of an administrative assessment
• to make a departure determination
• to accept or refuse to accept a child support agreement
• to refuse to remit a penalty raised as a result of estimate reconciliation (section 64A)
• certain refusal decisions which include:
- refusal to make a departure determination
- refusal to accept an estimate election or an application to continue an assessment after a child turning 18 years
- refusal to grant an application to reduce an annual rate of child support payable to nil.
[Item 1 - insert new sections 98W, 98X and 98Y ]
12.9 Objections to decisions must be lodged within 28 days of the person being served with notice of the decision by the Registrar. However, where an application is made to extend this period, the Registrar will have the power to grant or refuse the application. [Item 1 - insert new sections 98Z and 98ZD]
12.10 The proposed amendments specify the procedures and requirements to be followed, both by persons making objections to decisions of the Registrar and by the Registrar in considering such objections. The proposed amendments will ensure that parties have a clear understanding of the objection process. [Item 1 - insert new sections 98ZA, 98ZB, 98ZC, 98ZE, and 98ZH]
12.11 The proposed amendments will amend the general notification requirements of the Registrar in relation to decisions to which parties may now object and will ensure that information as to objection and appeal rights will be provided to parties. [Item 3 - repeal subsection 33(2) and insert new section 33(2); Item 4 - repeal subsection 34(2) insert new section 34(2); Item 5 - insert new section 60B; Item 6 - insert new subsection 64A(5),(6) and(7); Item 7 - insert new section 66C; Item 8 - repeal paragraph 76(3)(a) and insert new paragraph 76(3)(a); Item 9 - repeal subsection 96(2) and insert new subsection 96(2); Item 10 - insert new section 98JA; Item 11 - amend subsection 106(1); Item 12 - insert new subsection 106(1A); Item 13 - insert new subsection 106A(1); Item 14 - amend subsection 107(1); Item 15 - insert new subsection 107(1A); Item 16 - amend subsection 110(1); Item 17 - insert new subsection 110(1A); Item 18 - amend subsection 116(1); Item 19 - insert new subsection 116(1A) and (1B); Item 20 - amend subsection 132(1); Item 21 - insert new subsection 132(1A).]
12.12 The proposed amendments specify the procedures and requirements on parties wishing to appeal or seek review of an objection decision of the Registrar. [Item 1 - insert new sections 98ZE, 98ZF, 98ZG and 98ZJ]
13.1 Schedule 13 of the Bill will amend the Child Support (Assessment) Act 1989 (the Assessment Act) to:
• provide for the Registrar to initiate a departure from assessment
• extend the provisions for the exchange of information between parents
• give the Registrar the power to either increase or decrease child support based on the information provided
• allow the Registrar to refuse to make a determination without requiring a hearing
• allow both parents to appear and be heard at a hearing even though they have not provided a formal response.
13.2 The proposed amendments will ensure that both parties have the opportunity to be involved and participate in the departure process so that just and equitable decisions are made and are seen to be made. This will result in assessments which more accurately reflect parents' capacity to pay.
13.3 Immediately after the commencement of the "Child Support Adjusted Formula Income Amounts" in Schedule 1 and will not apply in relation to the 1997-98 child support year or any earlier child support year.
13.4 Transitional provisions are required, as there may be matters pending before the Registrar.
13.5 The Joint Committee proposed Recommendation 147 to address some limitations of the process for parties seeking to depart from a formula assessment.
13.6 The departure process relies on parents being aware of the financial circumstances of the other parent. Therefore while the Registrar may obtain information unavailable to the other party that indicates the administrative assessment does not accurately reflect a parent's income, he is unable to act on this information.
13.7 Where an application is made the Registrar must provide a copy of the application and any accompanying documents to the other party. The other party has a right of reply and frequently does so in writing. Currently the law is silent as to whether the Registrar is required to provide copies of these documents to the person applying for departure.
13.8 The Registrar is currently limited to making a determination in accordance with the application. If for example, the application is for a decrease in child support payable, the Registrar cannot make a determination that increases the amount. This may be despite information before him indicating that the circumstances of both parties would not be accurately reflected in the assessment. In this case the Registrar is restricted to simply refusing the application for departure in the absence of a cross application for departure from the other party.
13.9 The Registrar may refuse to make a determination where:
• there are no grounds
• the matters are too complex
• a person's subsequent application contains no new matters indicating grounds for departure.
The existing provisions are unclear as to whether or not the Registrar must give an applicant an opportunity to appear and be heard prior to deciding to refuse to make a determination.
13.10 The existing provisions are unclear as to whether or not the Registrar may give the party a right to be heard despite no formal response being lodged by them.
13.11 The proposed amendments will partially satisfy Recommendation 147 of the Joint Committee. In order to better integrate the measures proposed by the Joint Committee into the departure provisions it will be necessary to revise the overall structure of Part 6A. [Item 2 - repeal Part 6A and insert new Part 6A; Item 1 - amend paragraph 76(3)(aa); Item 3 - amend subsection 115(b); Item 4 - amend subsection 132(1)]
13.12 The proposed amendment will allow the Registrar to initiate the making of a determination where satisfied special circumstances exist. [Item 2 - insert new Division 3 "Departures initiated by the Registrar" in new Part 6A]
13.13 The proposed amendment will provide that the Registrar forward a copy of any reply documents from the other party to the applicant for the departure. [Item 2 - insert new subsections 98G(3) and 98N(2) in new Part 6A]
13.14 The proposed amendment will allow the Registrar to make a determination either increasing or decreasing child support payable based on the information before him. [Item 2 - insert new subsection 98S(2) in new Part 6A]
13.15 The proposed amendments will allow the Registrar to refuse to make a determination without a hearing being required. [Item 2 - insert new subsections 98E(a), section 98F, subsection 98J(2) in new Part 6A]
13.16 The proposed amendment will ensure that both parties have the right to be heard. [Item 2 - insert new subsection 98G9(3) in new Part 6A]
13.17 The new rules under Part 6A will be taken to apply to applications which have been made under Part 6A but not determined prior to the commencement of the new Part 6A. Special transitional rules will apply to the following:
• applications made prior to the commencement date of this Schedule
• matters in which the Registrar has previously refused to make a determination
• determinations made but not yet given effect by the Registrar.
[Item 5 - transitional provisions]
14.1 Schedule 14 of the Bill will amend the Child Support (Assessment) Act 1989 (the Assessment Act) to modify the income on which a child support liability is raised.
14.2 The proposed amendments will alter the basis on which a child support liability is raised by increasing the taxable income figure used by the amount of rental property loss included in the person's taxable income and also by the amount of exempt income pursuant to specific provisions of the Income Tax Assessment Act 1936 and 1997.
14.3 Immediately after the commencement of "Objections to Decisions of the Child Support Registrar" amendments in Schedule 12 and will not apply in relation to the 1998-99 child support year or any earlier child support year.
14.4 To determine an income base which better reflects a parent's capacity to provide child support the Joint Committee recommended at Chapter 19 that particular items be "added back" to adjust the parent's taxable income. To move towards consistency between agencies, items used by the Department of Social Security in determining eligibility for Family Payments such as net rental property losses and exempt foreign income will be added to taxable income for child support purposes.
14.5 The Registrar currently raises assessments using each person's taxable income to determine a child support income amount. The taxable income figure is adjusted by an inflation factor to update the taxable income.
14.6 The child support income amount will be determined by adding to the person's taxable income an amount equal to the rental property loss included in the calculation of taxable income and also by adding the person's exempt foreign income under section 23AF or section 23AG of the Income Tax Assessment Act 1936 for the period. A new definition of the term supplementary amount will be inserted. [Item 1 - insert new definition in section 5 of "supplementary amount"; Item 2 - repeal section 38 and insert new section 38 and section 38A; Item 3 - repeal section 45 and insert new section 45 and 45A]
14.7 The inflation factor will now be applied to update the total of the taxable income and the supplementary amount for the last relevant year of income. [Item 4 and 5 - amend section 55]
14.8 The presumption contained in section 57 (that a person's income is nil if they have received a nil tax assessment) will not apply where a person has a supplementary amount for that year. [Item 6 - insert subsection 57(1A)]
14.9 The Registrar may raise an assessment based on a taxable income and supplementary amount that he considers reasonable based on information held. This may occur where the Registrar is unable to readily ascertain either a person's taxable income or supplementary amount (for example where a tax return has not been or is not required to be lodged), or both these amounts, and the person has been required to supply details of those amounts. [Item 7 - amend paragraph 58(1)(a); Item 8 - amend paragraph 58(1)(b); Item 9 - amend subsection 58(1); Item 10 - amend paragraph 58(1A)(a); Item 11 - amend paragraph 58(1A)(b); Item 12 - amend subsection 58(1A)]
14.10 Where the Registrar subsequently ascertains both the taxable income and the supplementary amount for the appropriate year, the assessment must be amended. [Item 13 - amend paragraph 58(2)(b); Item 14 - repeal heading of Subdivision B and insert new heading; Item 15 - amend subsection 58(2)]
14.11 A person electing to lodge an estimate of their income under Part 5 will be required to estimate the taxable income and supplementary amount for the child support year. The child support liability will be determined by using the total of the two figures. [Item 16 and 17 - amend paragraph 60(1)(a); Item 18 - amend paragraph 60(2)(b); Item 19 - amend paragraph 60A(1)(b); Item 20 - amend paragraph 60(1)(b); Item 21 - amend paragraphs 61(1)(a) and 63(1)(a)]
14.12 Estimates of the total of taxable income and supplementary amount for a child support year will be reconciled against the total of actual taxable income and supplementary amount for that period. Penalties will apply where the total of the person's actual taxable income and supplementary amount exceed the person's estimate of the total of their taxable income and supplementary amount by 10% or more. [Items 22 and 23 - amend paragraph 64(1)(b); Item 24 - amend subsection 64(1); Item 25 - amend paragraph 64A(1)(b); Item 26 - amend paragraph 64A(1)(b); Item 27 - amend paragraph 64A(2)(a)]
15.1 Schedule 15 of the Bill will amend the Child Support (Assessment) Act 1989 (the Assessment Act) to enable child support assessments to be calculated using the most current taxable income available for each parent.
15.2 The purpose of the amendments is to enable child support assessments to be based on current taxable incomes as they become available. This will address community concerns that the present assessment process, based on taxable incomes from a financial year ending two years beforehand, is not a true reflection of parents' capacity to provide child support.
15.3 The following measures will ensure administrative assessments more accurately reflect parents' capacity to provide for their children by:
• removing the alignment of the child support year with a financial year
• retaining taxable income as the starting point for calculation of child support payable but using the most current taxable incomes of both parents thereby removing the need to apply an uplift factor
• requiring the Registrar to issue a new child support assessment as soon as practicable after a new taxable income becomes available
• providing for a child support period to be up to fifteen months
• revising the estimate provisions.
15.4 Immediately after the commencement of "Adjustment of Child Support Income Base" amendments in Schedule 14 and will not apply in relation to the 1998-99 child support year or any earlier child support year.
15.5 An administrative assessment of child support is calculated according to a formula using each parent's taxable income as a starting point. Before the beginning of each child support year, which is currently the same as a child support year, an administrative assessment is raised and issued. The assessment lasts for the duration of the child support year, subject to variations where a person's circumstances change.
15.6 The taxable income used as the starting point in the calculation is up to two years old, and therefore an uplift factor is applied to the taxable income to update this figure (based upon a forecast percentage increase in Average Weekly Earnings). The Joint Committee received submissions relating to the uplift factor and proposed Recommendations 130 and 131 to address these concerns.
15.7 If a person estimates that their income during the current year will be at least fifteen percent less than the income on which their child support is calculated, the person can elect that the estimated income amount be used as the basis for assessment. When an income tax return is subsequently lodged for the year of the estimate, the actual taxable income is reconciled against the estimated amount. If the actual taxable income is more than the estimated income amount, the child support assessment is recalculated using the actual taxable income
15.8 The Joint Committee received a number of submissions relating to the estimate provisions. Recommendations 124 to 129 were proposed to address these concerns.
15.9 The amendments provide that where the Registrar accepts an application for administrative assessment the Registrar must, as quickly as practicable, assess an annual rate of child support payable by the paying parent to the carer entitled to child support. The initial child support period will begin on the day the application was made. [Item 22 - repeal subsection 31(2) and insert new subsection 31(2); insert note at end of subsection 31(2) to indicate that new Part 4A deals with later child support periods; Item 64 - repeal subsection 93(2) and insert new subsection 93(2)]
15.10 Under the proposed amendments, the Registrar will be required to calculate the annual rate of child support payable in subsequent child support periods. The procedure for doing so is outlined in a new Part in the Act. [Item 23 - insert new Part 4A that deals with assessments of later child support periods]
15.11 The Registrar will be required to make a new assessment as soon as the paying parent's new taxable income becomes available. [Item 23 - insert subsection 34A(1) in new Part 4A]
15.12 As soon as practicable after the tax assessment is made the Registrar must assess the new annual rate of child support payable. The new child support period will start on the first day of the next named month. [Item 5 - insert definition of "named month"; Item 23 - insert subsection 34A(2) in new Part 4A]
15.13 If the carer entitled to child support lodges a tax return, but the new taxable income does not affect the amount of child support payable, then the Registrar will not issue a new child support assessment. [Item 23 - insert subsection 34A(3) in new Part 4A]
15.14 Where an agreement, determination under Part 6A, or court order provides that either the rate of child support payable or the parent's adjusted income amount has been worked out without reference to taxable income, then the Registrar will not be required to issue a new assessment upon a new taxable income becoming available. A new assessment reflecting the terms of the agreement, departure order, or court order will be made. [Item 23 - insert subsection 34A(4) in new Part 4A; Item 65 - insert paragraph 94(1)(d); Item 66 - after "such action" insert the words "(if any)" in subsection 94(1); Item 67 - insert note after subsection 94(1)]
15.15 The Registrar will not be required to raise a new child support assessment (giving rise to a new child support period) where a taxable return is lodged if the earlier child support period ends before the new period starts. [Item 23 - insert subsection 34A(5) in new Part 4A and insert a note]
15.16 If the Registrar accepts an agreement made in relation to a child which
affects the rate of child support already payable under an assessment (or
previous agreement) then the Registrar must assess the annual rate of child
support payable. The child support period in this case will begin on the first
day for which the rate of child support payable for the child is affected by the
agreement. [Item 23 - insert section 34B in new Part 4A; Item 70 - repeal
paragraph ^98U(4)(a) and insert new paragraph ^98U(4)(a) to include a reference
to new section 34B]
15.17 The Registrar must assess the annual rate
of child support payable by a paying parent before, or as soon as practicable
after, the start of the child support period. The following exceptions apply to
modify this general rule where:
• the period starts when an application is made under Part 4
• the period starts when parents apply for an agreement where previously an assessment was in place
• a new annual rate has been calculated as a result of a new taxable income
• the period starts on the first day from which an agreement would affect the annual rate of child support payable by the paying parent to the carer. [Item 23 - insert section 34C in new Part 4A and insert notes]
15.18 If a person fails to lodge a tax return so that a new taxable income is not available, the Registrar will review the assessment before the end of fifteen months from the commencement of the assessment. The Registrar will then issue a new assessment using an appropriate income amount, determined in accordance with the existing section 58.
15.19 A number of consequential amendments are required to reflect the change to the taxable income figure now used in assessments. [Item 4 - repeal definition of "last relevant year of income" in section 5 and insert new definition of "last relevant year of income"]
15.20 As a result of the amendments changing the taxable income, examples
currently used to illustrate how a child support liability is calculated need to
be updated. The new examples show that an inflation factor is no longer applied.
[Item 31 - repeal the examples at subsection 54(2) and substitute new
examples]
15.21 As the income figure on which assessments are based will be the most recent taxable income available no inflation factor will be applied to "update" that income. A number of consequential amendments are required to remove provisions that deal with or refer to the inflation factor. [Item 34 - repeal section 55 (Updating of taxable income); Item 40 - omit "(as multiplied by the inflation factor (if any) applicable to the child support year under regulations made for the purposes of section 55)"]
15.22 The concept of a child support year aligned with a financial year will be replaced with a child support period not to exceed 15 months. The amendments define how and when a child support period will commence and end. [Item 14 - insert new section 7A(1)]
15.23 A child support period will start on the day:
• an application for an administrative assessment is made
• a child support agreement is made
• immediately after the period covered by the preceding application or agreement. [Item 14 - insert new section 7A(2)]
15.24 A child support period will end on the earliest of the following:
• the day on which the 15 month period expires
• the end of the month in which the Registrar makes a new assessment as a result of a person having lodged a tax return
• the day before an agreement is entered into where an assessment was already in place
• the day before an agreement is entered into which changes the rate of child support payable. [Item 14 - insert new subsection 7A(3)]
15.25 A series of examples are provided to illustrate the operation of the new rules. [Item 14- Insert new subsections 7A(4), (5), (6), (7) and (8)]
15.26 The concept of a "child support year" is replaced by a "child support period". This change requires a number of consequential amendments of provisions where the term "child support year" or "year" appears. [Item 1 - insert new definition of "child support period" in section 5 to refer to subsection 7A(1); Item 2 - amend definition of EAWE by omitting "year" and substituting "period"; Item 3 - amend definition of EAWE in section 5 to refer to "the calendar year in which the child support period started"; Items 6 and 7 - amend definition of AWE in section 5 to refer to the "calendar year in which the child support period started"; Item 8 - repeal example at the end of the definition of AWE amount and insert a new example; Items 9 and 10 - amend the definition of relevant partnered rate of social security in section 5; Items 11 and 12 - amend the definition of relevant unpartnered rate of social security in section 5; Item 13 - amend definition of yearly equivalent of the relevant AWE amount in section 5; Item 24 - omit "child support year" and substitute "child support period" in subsection 36(1), paragraphs 38(a) and 39(1)(a) and subparagraph 39(1)(b)(i); Item 28 - omit "year" and substitute "period" in section 42 and subsection 44(1); Item 29 - omit "child support year' and substitute "child support period" in section 45; Item 30 - omit "year" and substitute "period" in section 46, subsection 48(1), sections 49 and 51, subsection 52(1), subsection 52(2) (paragraph (b) of the definition of maximum possible child support liability) and subsection 54(1); Item 32 - omit "year" and substitute "period" in section 54B; Item 35 - omit "year" and substitute "period" in paragraph 56(4)(a); Item 36 - omit for "current child support year' and substitute "and supplementary amount for rest of current child support period" in subsection 56(4); Item 37 - omit "year" and substitute "period" in paragraph 57(8)(a); Item 38 omit "for current child support year" and substitute "and supplementary amount for rest of current child support period" in subsection 57(8); Items 39 and 41 - omit "child support year" and substitute "child support period" (first and last occurring) in subsection 58(1); Item 42 - omit "child support year" and substitute "child support period" in subsection 58(1A); Item 47 - omit year (wherever occurring) and substitute "period" in subsections 61(2), (3) and (4) and subsections 62(1A) and (3); Item 49 - omit "year" and substitute "period" in subsections 63(2), (3) and (4); Item 52 - omit "year" and substitute "period" in subsections 64(2), (3) and (4); Item 56 - omit "year" and substitute "period" in subsections 66(1) and (2) and 66A(1); Item 58 - omit "year" and substitute "period" in subsections 66A(3), 67(1) and 68(1) and section 69; Item 61 - omit "year" and substitute "period" in paragraph 77(a); Item 62 - omit "years" and substitute "periods" in subsection 84(4); Item 63 - omit "year" and substitute "period" in subsection 84(4); Item 68 - omit "years" and substitute "periods" in subsection ^98S(3); Item 69 - omit "year" and substitute "period" in subsection ^98S(3); Item 72 - omit "year" and substitute "period" in paragraph 117(3A)(b); Item 74 - omit "years" and substitute "periods" in subsection 118(2); Item 75 - omit "year" and substitute "period" in subsection 118(2); Item 76 - omit "years" and substitute "periods" in subsection 125(4); Item 77 - omit "year" and substitute "period" in subsection 125(4)]
15.27 The substitution of a child support period in place of a fixed child support year requires a notional 12 month period to be applied in some cases. The 12 month period in these cases will start at the beginning of the relevant child support period. [Item 57 - omit "child support year" and substitute "12 months starting at the beginning of the child support period" in subsection 66A(2)]
15.28 In some circumstances an administrative assessment may be made for a part child support period. In these instances the annual rate payable will be calculated as if the beginning and end of the part period were the beginning and end of a whole period. [Item 59 - repeal subsection 71 and substitute new section 71 which deals with a part child support period; Item 60 - omit "year, or part of the child support year " and substitute "period, or the part of the child support period" in paragraph 75(2)(b)]
15.29 The level of care parents have in relation to their children will be determined by reference to a 12 month period measured from the start of the child support period. [Items 15, 17 and 19 - omit "of the child support year" and substitute "in the 12 months immediately after the start of the child support period" in paragraph 8(1)(b), subparagraphs 8(3)(b)(i) and (ii) and subsections 8A(3), 8A(4) and 8A(5); Item 16 - omit "those days" and substitute "days in the child support period" in subsection 8A(3); Items 18 and 20 - omit "those nights" and substitute "the nights in the child support period" in subsections 8A(4) and 8A(5)]
15.30 The examples illustrating the treatment of care where there is contravention of a court order or parenting plan are repealed. However, the principles illustrated in those examples will still apply with lawful and factual care being calculated over the days in the child support period that a person would lawfully be entitled to have care of a child and limited by the days another person actually has care of the child in that child support period. [Item 21 - repeal examples 1 and 2 in subsection 8A(7); Item 33 - repeal examples 1 and 2 in section 54B]
Example 1: Level of lawful care less than required minimum for assessment
Pat and Chris separate on 28 August 1998. They have one child Alan (aged 9). A parenting plan is registered by them at the Family Court in Melbourne on 3 March 1999. The plan provides that Alan is to live with Pat at Pat's home in Brisbane. It also provides that Alan will stay at Chris's home in Adelaide for one half of the school holidays. Alan goes to stay with Chris for the last two weeks of the June school holidays. At the end of the holidays Alan does not return to live with Pat. Chris applies for child support for Alan on 14 December 1999.
To be eligible for an assessment of child support Chris must have lawful care that amounts to at least substantial contact. Chris is only entitled to receive child support to the level provided for in the registered parenting plan. If Chris were eligible for an assessment of child support, the care arrangements for Alan would be calculated over a 12 month period beginning on 14 December 1999 and running until 13 December 2000. Under the terms of the parenting plan Chris's lawful care over that 12 month period would amount to 102 nights. This works out to be 27.95% which is less than the requisite minimum of 30% of nights in the child support period. Chris therefore is not entitled to receive child support (unless a new parenting plan reflecting the changed care arrangements is registered.)
Example 2: Level of lawful modified by lawful and factual care
A court order provides that Alex and Kim are to have joint parental and residential responsibility for Stephanie (aged 7). The order provides that Stephanie is to live with Alex each alternate week commencing Monday 4 January 1999 and with Kim each alternate week commencing Monday 11 January 1999. The arrangement is to continue during the school holidays. Alex and Kim have an assessment that is based on care of Stephanie being shared. The care arrangements for Stephanie would be calculated over the 12 month period beginning on Monday 18 January (when the application was made) and ending on Monday 17 January 2000.
On 12 July 1999 Stephanie stays with Alex and does not go to live with Kim. Alex notifies the Registrar on 13 July 1999 that Stephanie will now be living with Kim every fourth week. Under the terms of the court order Alex would have had care of Stephanie for 183 days and Kim would have had care of Stephanie for 182 days.
Based on the actual care arrangements Alex will have care of Stephanie for 238 days over the whole child support period and Kim will have Stephanie for a total of 147 days. Kim's care over the child support period works out to be 34.79%. Kim is taken to have substantial contact with Stephanie and child support would be calculated on this basis. Only 183 of the 238 days Alex has care of Stephanie are lawful. Alex is taken to have shared care and Alex's entitlement to child support would be calculated on the basis.
[Basis of Calculation: Kim - 6 weeks +1 day (43 days) until 17 January 2000 + 12 weeks (84 days) of care before 12 July 1999 = 127 days (actual). Alex - 21 weeks (147 days) actual care until 17 January 2000 + 13 weeks (91 days) of care before 12 July 1999 = 238 (actual).]
15.31 An allowance for a relevant dependent child included in the paying parent's exempted income amount will be worked out based on the child's age 12 months after the start of the child support period. [Item 25 - insert a reference to the new subsection 39(5); Item 26 - omit "at the end of the child support year " and substitute "12 months after the start of the child support period" in paragraphs 39(2)(a) and (b); Item 27 - insert new subsection 39(5)]
15.32 The move away from the financial year means that an estimate of income lodged in respect of child support assessments commencing on or after 1 July 1999 will generally be for a period other than a financial year. The estimated amount of income will no longer be able to be reconciled against the actual taxable income for that financial year and the amendments introduce a new method for testing the accuracy of estimates.
15.33 A person will continue to be able to elect that, for the purposes of working out their annual rate of child support, their child support income is different to that which has been used or would be used in the assessment. However, under the proposal, an estimate of income will modify the assessment only for the remainder of the period of the assessment to which the estimate relates. If a person makes an estimate election, the person's child support income amount is taken to be the amount the person elected. This is then used for the purpose of assessing the annual rate of child support payable on or after the day the election was made. [Item 44 - repeal section 60 and insert new subsection 60(1); Item 46 - repeal subsection 61(1) and insert new subsection 61(1)]
Subsequent estimates
15.34 Where a person makes a subsequent estimate then the child support income amount for that person is taken to be the amount the person elected in that later estimate for the remaining period. [Item 48 - repeal subsection 63(1) and insert new subsection 63(1)]
15.35 A consequential amendment is required to the heading of Subdivision B to reflect the changes to estimates and the concept of a child support year. [Item 43 - repeal the heading for Subdivision B of Division 3 of Part 5 and insert a new heading]
Method Statement
15.36 The estimate of a person's income for the remaining days in the child support period is to be worked out according to a specified method. This will be referred to as a "Method Statement". The first step is for the person to work out the length of the remaining period. This will start on the day the estimate is made (or the day the child support period starts if this is a later date) and will end 15 months after the period started (or would have started). The next step is for the person to provide an estimate of their expected taxable income and supplementary amount for that remaining period. The total estimated income is then divided by the number of days in the remaining period (whether that is more or less than 12 months). The result is then multiplied by 365 to arrive at an annualised amount. [Item 44 - insert new subsection 60(5)]
Example of Method Statement
Step 1
Calculate Length of the period - 11 months
(16/03/2000
to 15/02/2001)
(Original child support period 17/11/99 to 15/02/01)
Step 2
Estimate of taxable income $24,800
(16/03/2000 to 15/02/2001)
Step 3
Estimate of supplementary amount Nil
(16/03/2000 to 15/02/2001)
Step 4
Total of taxable income & supplementary amount $24,800
Step 5
(a) Divide income $24,800
by days in
period 335
Result = 74.030
(b) Multiply Result x 365 74.03 x
365
15.37 A person will be unable to make an estimate election if an income amount order is in place. [Item 44 - insert new subsection 60(5)]
15.38 An initial estimate election will need to show a reduction in taxable income of fifteen percent or more from that recorded in that person's child support assessment. [Item 44 - insert new subsection 60(3)]
15.39 A person may make another election at a later stage provided it is at least 2 months after the first and subsequent elections. Each later election must revoke the previous election and the amount worked out for each later election must be less than or greater than the amount in the first election. [Item 44 - insert new subsection 60(4)]
15.40 A person making an estimate is able to treat the period to be covered by the estimate as if the remaining period lasts for exactly 12 months, even though the period is longer than 12 months. [Item 44 - insert new subsection 60(6)]
15.41 An initial estimate election will need to be supported by appropriate evidence. It must specify:
• the amount the person elects to be their child support income amount
• an estimate of the person's taxable income for the remaining period as if that period were a year of income
• an estimate of the person's supplementary amount for the remaining period as if that period were a year of income
• whether the remaining period is to be treated as being 12 months.
[Item 44 - insert new subsection 60(7)]
15.42 The Registrar may refuse to accept the person's election if the Registrar is satisfied that the amount the person has estimated in the "Method Statement" as either their taxable income or supplementary amount is likely to be less than their actual taxable income or supplementary amount. [Item 45 - repeal subsection 60A(1) and insert new subsection 60A(1)]
15.43 A person who lodges an estimate will be required to notify the Registrar (following a notice from the Registrar requiring the person to do so) when their income has changed so that the estimate is no longer accurate. The type of event contemplated will be a change in income. The Registrar will then be able to amend the rate of child support payable to reflect the change to the estimate. [Item 50 - insert new subsections 63A(1) and (2)]
15.44 If the person fails to notify the Registrar of a change in income as required, the Registrar may at a later stage amend the rate of child support to give effect to that change from the date the change occurred. [Item 50 - insert new subsection 63A(3)]
15.45 The Registrar may make a new assessment for part of the child support period. This amendment does not affect the operation of the existing notification requirements under section 160. Therefore, a person may be guilty of an offence punishable on conviction by imprisonment for 6 months. [Item 50 - insert new subsection 63A(4); insert note that provides that the new section 63A does not affect the Registrar's power under section 75 to amend assessments]
15.46 As it will no longer be possible to reconcile child support with the taxable income of a financial year the Registrar will require the person to confirm the accuracy of the estimate at the end of the period it covers. The proposed amendment provides for the Registrar to review an estimate from time to time and if necessary require the person who has lodged the estimate to provide such further information as is necessary to support the estimate.
15.47 The Registrar may amend a child support assessment if the person who made the election has complied with a notice under section 161 of the Assessment Act to give the Registrar information (either in person or by producing documents) which are relevant to determining the accuracy of an estimate. [Item 50 - insert new subsection 63B(1) and (2)]
15.48 If the person does not comply with a notice to provide information the Registrar may amend the assessment (and therefore the annual rate of child support payable). The assessment may be amended to the day the estimate was made or to the date a previous notice was given and complied with (if applicable). [Item 50 - insert new subsection 63B(3)]
15.49 This amendment does not affect the operation of the existing requirements in relation to a notice under section 161. Therefore, a person who fails to comply with a notice may be guilty of an offence punishable on conviction by imprisonment for 6 months. [Item 50 - insert new subsection 63B(4); insert note that provides that the new section 63B does not affect the Registrar's power under section 75 to amend assessments]
15.50 Where a person's estimate of income has been used as the basis of an assessment the Registrar will compare it with the person's real income for the period covered by the estimate. This will be calculated by adding up the person's real taxable income and supplementary amount for the period estimate, dividing it by the days in the remaining period and multiplying the result by 365. If the person's estimate is less than their real income then the income used in the assessment will be taken to have always been their real income. The assessment based on the estimate would be adjusted accordingly. [Item 51 - repeal subsection 64(1) and insert a new subsection 64(1)]
15.51 As a result of the new estimate provisions a number of consequential
amendments are required to redefine the period over which an estimate is
reconciled. [Item 53 - insert new subsection 64(5) which defines "real
remaining period supplementary amount", "real remaining period taxable income"
and "real remaining period"; Item 55 - insert new subsection 64A(8) which refers
to "real remaining period supplementary amount" and "real remaining period
taxable income"]
15.52 The proposed amendment retains the penalty provisions relating to underestimation of an estimate but modifies them to accord with the proposed revised reconciliation/confirmation provisions. (Item 54 - repeal subsection 64A(1) and insert a new subsection 64A(1)]
15.53 The proposed amendment retains grounds for departure from administrative assessment where a parent incurs high costs in order to have contact with a child. Previously, the costs were high if during the year they totalled more than 5% of the parent's child support income amount. As a child support assessment is no longer for a fixed 12 month period, a consequential amendment is required to measure the costs over a notional period. [Item 71 - repeal subsection 117(3A) and substitute new subsection 117(3A))
15.54 The proposed amendment retains grounds for departure from administrative assessment where a parent incurs high child care costs for a child under 12 years old. Previously, the costs were high if during the year they totalled more than 5% of the parent's child support income amount. As a child support assessment is no longer for a fixed 12 month period, a consequential amendment is required to measure the costs over a notional period. [Item 73 - repeal subsection 117(3B) and substitute new subsection 117(3B)
15.55 The proposed amendments alter the requirement for the Registrar to publish AWE, EAWE and social security pension figures as soon as practicable after 1 January of each year. The figures will now be published before 1 January each year. [Item 78 - repeal section 155 and insert new section 155]
15.56 The new rules will apply to assessments of child support for periods commencing on or after 1 July 1999. The rules introduce a fundamental change from using the taxable income of two years before hand for assessment purposes to using the most recent taxable income as soon as it becomes available. Transitional rules are required. These rules will enable new child support assessments based on the parents' taxable incomes for the year ended 30 June 1999 to be issued as the taxable incomes become available from 1 July 1999 onwards. [Item 79 & 80]
16.1 Schedule 16 of the Bill will amend the Child Support (Registration and Collection) Act 1989 (the Registration and Collection Act) to enable paying parents to elect to pay their child support in accordance with a nominated period rather than having to pay a monthly amount by the 7th of each month.
16.2 The proposed amendments will provide for more flexible due dates for child support liabilities.
16.3 On 1 July 1998.
16.4 Section 66 of the Registration and Collection Act requires that all child support debts be paid monthly, the amount for the month being due and payable on the seventh day of the following month.
16.5 Payment of a child support liability is due on the seventh day of the following month irrespective of a paying parent's pay cycle. This can cause confusion to paying parents who receive an account statement which may seem to indicate that they are in arrears despite making regular payments.
16.6 The Register must include particulars from the child support assessment, court order or maintenance agreement. [Item 3 - repeal section 26, insert new subsection 26(1)
16.8 Under the proposed amendments, the Register must also include particulars relating to the enforceability of the liability, being the day on which the liability first becomes enforceable, each day where the liability ceases to be enforceable, each day on which the liability again becomes enforceable and particulars relating to any suspension of the liability. [Item 3 - repeal section 26, insert new subsection 26(3)]
16.9 The Register may also include the daily rate of payment in relation to the periodic amount, a statement as to whether or not employer withholding applies and any other particulars that the Registrar considers necessary or desirable to include. [Item 3 - repeal section 26, insert new subsection 26(4)]
16.10 The proposed amendments will require the Registrar to enter a payment period on the Register, where the Registrar is going to collect amounts due to the Commonwealth under a liability, or in relation to a liability, by deduction from the salary or wages of the paying parent (referred to as the "payer"). The period that the Registrar must enter is the payment period that reflects the payer's pay cycle. The start day of the payment period is the first day of the first of the payment periods in which deduction from the salary or wages of the payer will occur. [Item 3 - insert new section 26A]
16.11 "Payment period" will be defined as "a period of a week, a fortnight, a 4 week period, a month or a calendar month". [Item 2 - insert definition of "payment period" in subsection 4(1)]
Paying parents wanting to make child support payments other than monthly
16.12 The proposed amendments will allow the payer of an enforceable maintenance liability, to elect to pay in accordance with a nominated payment period if the Registrar is not going to collect amounts due to the Commonwealth under, or in relation to, a liability by deduction from their salary or wages. If the payer elects to pay in accordance with an elected payment period, the Registrar must enter the elected period as the period at which amounts are payable under the liability, if the Registrar is satisfied that it will be more convenient for the payer to accrue debts in respect of the elected period. [Item 3 - insert new section 26B]
Day from which an elected period starts
16.13 If the payer elects to pay child support in accordance with a nominated payment period, they must specify the day from which the payment period starts. The Registrar must enter in the Register the specified day as the day from which the elected period starts. For example, the payer may elect to pay fortnightly with the start day of the period being a Wednesday. Therefore the period will end two weeks later on a Tuesday. [Item 3 - insert new subsection 26B(4)]
16.14 Under the proposed amendments, if the Registrar is not going to collect amounts due to the Commonwealth under, or in relation to, a liability by deduction from the salary or wages of the payer of the liability and the payer has not elected a payment period, the Registrar must enter a month as the period at which amounts are payable in respect of the liability. [Item 3 - insert new subsection 26B(5)]
16.15 The proposed amendments will require the Registrar to register an initial period in the Register if the payer elects to pay in accordance with an elected payment period or if the Registrar is required to enter a payment period that reflects the payer's pay cycle and the payment period starts on a day after the day that the liability becomes enforceable. [Item 3 - insert new subsection 26C(1); Item 2 -insert definition of "initial period" in subsection 4(1)]
16.16 If the Registrar is about to register a liability, the proposed amendments will require that the initial period starts on the day on which the liability first becomes enforceable under the Act. The initial period will finish on the day before the payment period that reflects the payer's pay cycle or on the day before the payer's elected payment period commences. [Item 3 - insert new subsection 26C(2)]
16.17 The Registrar is required to vary the Register when a low-income non-enforcement period ends to make the liability again enforceable. The initial period, in respect of the liability, starts on the day that the Registrar has entered in the Register as the time at which the liability again becomes enforceable under the Act. The initial period will finish on the day before the payment period that reflects the payer's pay cycle or on the day before the payer's elected payment period commences. [Item 3 - insert new subsection 26C(3)]
16.18 The Registrar is required to vary the Register when an application for a registered maintenance liability to become enforceable again is received. The initial period, in respect of the liability, starts on the day that the Registrar has entered in the Register as the day on which the liability again becomes enforceable under the Act. The initial period will finish on the day before the payment period that reflects the payer's pay cycle or on the day before the payer's elected payment period commences. [Item 3 - insert new subsection 26C(4)]
16.19 The proposed amendments will require the Registrar to convert a periodic amount payable under a registered maintenance liability arising under a court order or a maintenance agreement to a daily rate and then to either a weekly, fortnightly, 4 weekly or monthly rate of payment. [Item 4 - insert new subsection 28B(1)]
16.20 The proposed amendments will require the Registrar to convert a periodic amount payable under a registered maintenance liability arising under a child support assessment in respect of a day into a weekly, fortnightly, 4 weekly or monthly rate of payment. [Item 4 - insert new subsection 28B(2)]
16.21 If the Registrar is to collect amounts due to the Commonwealth under, or in relation to a liability, by deduction from the salary or wages of the payer, the Registrar must also convert the periodic amount or the daily amount to a weekly rate of payment. [Item 4 - insert new subsection 28B(3)]
16.22 The Registrar must convert a periodic amount payable under a registrable maintenance liability to the rate of payment that reflects the payment period that is entered in the Register in respect of the liability. [Item 4 - insert new subsection 28B(4); Item 5 - amend section 29]
16.23 If a registrable maintenance liability is registered under the Act, amounts payable are debts due to the Commonwealth by the payer in accordance with the particulars of the liability entered in the Child Support Register. The eligible carer (referred to as the "payee") is not entitled to, and may not, enforce payment of amounts payable under the liability. The amounts are payable by the payer at the rate entered in the Register in respect of the periods entered in the Register. [Item 6 - repeal section 30 and substitute new section 30]
16.24 The following are examples of how amounts payable under section 30 are to be calculated.
EXAMPLE 1:
Peter pays child support under a child support
assessment at a daily rate of $6.84463.
The liability became enforceable on 4
July 1998. The Registrar is going to collect the amounts payable for periods
from 10 July 1998 by deduction from Peter's wages.
Periodic amount : The periodic amount payable under the assessment entered in the Child Support Register is the daily rate of $6.84463 [paragraph 26(1)(f)].
Payment period : Section 26A requires the Registrar to enter in the Register [paragraph 26(2)(b)] a payment period of a fortnight, starting from 10 July 1998, to reflect Peter's fortnightly pay cycle.
Initial period : As the first day of the pay period in which deductions are to commence is 10 July 1998, the initial period entered in the Register is 4 July 1998 to 9 July 1998.
Conversion of periodic amount to a rate of payment
Section 28 requires the Registrar to convert the $6.84463 periodic amount to a fortnightly rate of $95.82 ($6.84463 multiplied by 14) so that it reflects Peter's payment period of a fortnight.
The Registrar enters in the Register $95.82 per fortnight as the rate of payment in relation to the periodic amount [(paragraph 26(2)(d)].
Amounts payable under section 30
An amount of $95.82 per fortnight [paragraph 26(2)(d)] is payable under section 30 for both the initial and subsequent payment periods.
Note: Example 1, following paragraph 16.30, shows when the amounts payable by Peter under section 30 become due and payable under section 66.
EXAMPLE 2:
Francine pays child support under a child support
assessment at a daily rate of $8.21355. The liability became enforceable on 1
August 1998. The Registrar is not going to collect the amounts by
deduction from Francine's wages.
Periodic amount : The periodic amount payable under the assessment entered in the Register is the daily rate of $8.21355 [paragraph 26(1)(f)].
Payment period : As Francine does not make an election for a particular payment period to apply, section 26B requires the Registrar to enter in the Register a month as the period at which amounts are payable [paragraph 26(2)(b)].
Initial period : As the payment period starts on the same day the liability started, there is no initial period.
Conversion of periodic amount to a rate of payment
Section 28 requires the Registrar to convert the $8.21355 periodic amount to a monthly rate of $250.00 ($8.21355 multiplied by 30.4375) so that it reflects Francine's payment period.
The Registrar enters in the Register $250.00 per month as the rate of payment in relation to the periodic amount [paragraph 26(2)(d)].
Amounts payable under section 30
An amount of $250.00 per month [paragraph 26(2)(d)] is payable under section 30.
Note: Example 2, following paragraph 16.30, shows when the amounts payable by Francine under section 30 become due and payable under section 66.
16.25 The proposed amendments will enable the Registrar to vary the Register details to reflect a payer's pay cycle if the Registrar becomes aware, other than by a notice from the payer's employer, or a notice from the payer, that the payer's pay cycle is different to the payment period entered in the Register. The Registrar may vary the particulars in the Register by deleting the period in the Register and substituting another payment period that reflects the payer's pay cycle. [Item 7 - insert new section 42A]
16.26 The proposed amendments will enable the Registrar to vary the Register details to reflect a payer's pay cycle if the Registrar either receives a notice from the payer's employer, or a notice from the payer which indicates that the period of the payer's pay cycle is different to the payment period entered in the Register. The Registrar must within 28 days of receiving a notice from the employer or the payer, vary the particulars in the Register by deleting the period in the Register and substituting another payment period that reflects the payer's pay cycle. [Item 7 - insert new section 42B]
16.27 The proposed amendments will allow the payer of an enforceable maintenance liability to elect to pay in accordance with a nominated payment period where the Registrar is not going to collect amounts due to the Commonwealth under, or in relation to, an enforceable maintenance liability from the salary or wages of the payer of the liability. [Item 8 - insert section 65A(1) and (3) of new Part IVA]
16.28 In making an election, the payer will be required to specify a new payment period and the day from which the period starts. [Item 8 - insert section 65A(2) of new Part IVA]
16.29 Where the payer makes an election under section 65A, the proposed amendments will require the Registrar to vary the particulars of the entry in the Register if the Registrar is satisfied that it will be more convenient for the payer to accrue debts in relation to the elected period instead of the period in the Register. In varying the Register, the Registrar must, within 28 days, substitute the elected period and enter the day from which the elected period starts. [Item 8 - insert section 65B of new Part IVA]
16.30 Currently, an amount that becomes a child support debt in any month is due and payable on the seventh day of the following month. The proposed amendments will mean that an amount that becomes a child support debt in respect of a day in an "initial period" will be due and payable on the seventh day of the month following that day. For example if an "initial period" is from 16 May to 19 June, the amount that covers the days from 16 May to 31 May will be due and payable on 7 June. The amount that covers the days from 1 June to 19 June will be due and payable on 7 July.
16.31 An amount that becomes a child support debt in any "payment period" is due and payable on the seventh day after the end of the period. For example if a "payment period" is fortnightly then the child support debt will be due and payable on the seventh day after the end of that fortnight. [Item 9 - repeal section 66 and insert new section 66]
16.32 Examples of how amounts due and payable under section 66 are to be calculated
EXAMPLE 1
Peter pays child support under a child support
assessment at a daily rate of $6.84463.
An amount of $95.82 per fortnight
($6.84463 multiplied by 14) is payable under section 30 for both the initial and
payment periods. The liability became enforceable on 4 July 1998. The initial
period is therefore 4 - 9 July 1998 and the payment period starts on 10 July
1998. The Registrar is going to collect the amounts payable for periods from 10
July 1998 by deduction from Peter's wages.
Amount due and payable under subsection 66(1) for the initial period:
The amount payable for the 6 day initial period of 4 July 1998 to 9 July 1998 is due and payable the following month on 7 August 1998 and is $41.07 (6 days @ the fortnightly payment rate of $95.82).
Amount due and payable under subsection 66(2) for the payment
period:
The amount payable for the payment period 10 July 1998 to
23 July 1998 is $95.82 and is due and payable 7 days later on 30 July 1998. The
amount payable for the payment period 24 July 1998 to 6 August 1998 is
$95.82 and is due and payable 7 days later on 13 August 1998. Subsequent
fortnightly payments continue to be payable 7 days after the end of each
fortnight.
Section 49 discharges Peter from paying to the Registrar so
much of these amounts as are deducted by his employer.
EXAMPLE 2
Francine pays child support under a child support assessment at a daily rate of $8.21355. An amount of $250.00 per month ($8.21355 multiplied by 30.4375) is payable under section 30 for each payment period. The liability became enforceable on 1 August 1998. The payment period also started on that date. The Registrar is not going to collect the amounts by deduction from salary or wages.
Amount due and payable under subsection 66(1) for the initial period:
There was no initial period because the payment period commenced on the same day the liability became enforceable. Therefore, no amount is due and payable on the 7th of the following month in respect of an initial period .
Amount due and payable under subsection 66(2) for the payment period:
The amount payable for the payment period 1 August 1998 to 31 August 1998 is $250.00 and is due and payable 7 days later on 7 September 1998. Subsequent monthly payments continue to be payable 7 days after the end of each month.
16.33 Under the proposed amendments, where a payer makes an election to pay child support in accordance with a nominated payment period and the Registrar refuses to give effect to the election, the payer will be able to object under section 85 against the decision of the Registrar. [Item 1 - amend subsection 4(1) (definition of appealable refusal decision)]
16.34 The proposed amendments will require the Registrar to vary the particulars in the Register if the paying parent elects to pay in accordance with a nominated payment period or if the period registered does not reflect their pay cycle. The paying parent and the carer will have objection rights under section 83 in relation to any variation made to the details on the Register.
17.1 Schedule 17 of the Bill will amend the Child Support (Assessment) Act 1989 (the Assessment Act) to allow a person to lodge an income estimate election up to 31 July following the end of the child support year, and to allow the Registrar to reject an income estimate election where satisfied it does not accurately reflect the person's financial circumstances.
17.2 The proposed amendments will:
• give parents more time to confirm their actual taxable income for the child support year
• reduce the incidence of overpayments to persons receiving child support which currently occur as a result of inaccurate estimates.
17.3 Immediately after the commencement of the "Child Support Adjusted Formula Income Amounts" in Schedule 1 and will not apply in relation to the 1997-98 child support year or any earlier child support year.
17.4 Child support assessments are based on each parent's relevant income for the child support year. This income is arrived at by starting with the amount of taxable income shown in a person's income tax return two years prior to the child support year in question.
17.5 The Assessment Act allows a person to elect that their child support income amount for the child support year is their estimated income for that year but only where such an election is made before or during the child support year (section 60). Therefore after the child support year ends (currently 30 June) and a person wishes to modify their child support income to reflect their actual income, they can only make a departure application.
17.6 The Joint Committee expressed considerable concern on the issue of inaccurate estimates and the effect manipulation of the estimate provisions has on carers. Additionally reconciliation of a person's estimated income against actual taxable income can cause an unexpected arrears amount for liable parents. Recommendation 128 was proposed to address these concerns.
17.7 The proposed amendment will partially satisfy Recommendation 128 of the Joint Committee in relation to improving the flexibility of the Scheme in dealing with individual client circumstances.
17.8 The proposed amendment will allow a person to lodge an income estimate election up to 31 July of the following child support year, thereby ensuring that their assessment accurately reflects their income for the year. For example, an estimate for the 1998-99 child support year may be lodged up to 31 July 1999. Prior to this amendment the cut off date would have been 30 June 1999. [Item 1 - amend paragraph 60(1)(a); Item 2 - insert subsection 60(4); Item 3 - amend paragraph 60(2)(b)]
17.9 The Registrar will be able to reject an estimate where satisfied it does not accurately reflect the person's capacity to pay. The proposed amendment will reduce the incidence of overpayments to persons receiving child support which currently occur as a result of inaccurate estimates. [Item 4 - insert new section 60A]
18.1 Items 1 to 17, 20 and 21 of Schedule 18 of the Bill will amend the Child Support (Assessment) Act 1989 (the Assessment Act) to provide that either parent can apply for a child support assessment.
18.2 Items 18 to 19, 20 and 21 Schedule 18 of the Bill will amend the Child Support (Registration and Collection) Act 1988 (the Registration and Collection Act) so that a liability arising out of a paying parent's application will not be registered for collection until the eligible carer applies to the Registrar to have it collected.
18.3 The purpose of the amendments is to reinforce that parents have the primary responsibility for the financial support of their children and will:
• encourage parents to take an active role in making choices about applying for child support
• allow both eligible carers and paying parents to apply for an assessment of child support.
18.4 On the day on which the Act receives Royal Assent and will not apply to applications for administrative assessment made before 1 July 1998.
18.5 Currently, only a person who has care of a child can make an application to the Registrar for an administrative assessment, indicating at that time whether or not to have the liability collected by the Registrar.
18.6 The Joint Committee identified this as a concern for paying parents and in Recommendation 156 proposed that either parent be able to apply for an assessment of child support.
18.7 The proposed amendment will address the recommendation of the Joint Committee and enable the paying parent to ascertain the actual amount of their liability.
18.8 The proposed amendments will allow the paying parent to make an application to the Registrar for an administrative assessment as a person seeking to pay child support to an eligible carer. However, the paying parent will not be able have the liability registered for collection by the Registrar.
Persons who may apply - parents other than eligible carers
18.9 A person who does not have care of a child will now be able to apply to the Registrar for an administrative assessment seeking to pay child support for that child. The requirements for a valid application will now be that the applicant is a parent of the child and a resident of Australia on the day they make the application. The applicant must be seeking to pay child support for the child to an eligible carer, who is not living with the applicant as their partner on a genuine domestic basis. This type of application will be called a liable parent application. [Item 2 - insert definition of "liable parent application" in section 5; Item 4 - repeal section 26 and insert new section 25A]
18.10 As a result of these changes consequential amendments are required to a number of provisions in the Assessment Act. [Item 3 - repeal paragraph 23(c) and insert new paragraph 23(c), Item 5 - amend subsection 29(1); Item 9 - repeal paragraph 83(1)(b) and insert new paragraph 83(1)(b); Item 11 - repeal paragraph 106(4)(c) and insert new paragraph 106(4)(c), Item 14 - repeal paragraph 107(4)(c) and insert new paragraph 107(4)(c), Item 15 - repeal paragraph 109(2)(b) and insert new paragraph 109(2)(b)]
18.11 Where a liable parent application is made, the applicant will be called the "liable parent" and the person to whom the application sought to pay child support will be called the "carer entitled to child support". [Item 7 - repeal paragraph 31(b) and insert new paragraph 31(b)]
18.12 Where the Registrar accepts a "liable parent application", the
Registrar must immediately notify both parties of this acceptance. [Item 8
- amend subsection 34(1)]
Persons who may apply - eligible carers
18.13 Where an application is an "eligible carer application" proof of parentage will still be required. However, where an application is made by a paying parent it will be taken to be a declaration that they are a parent of the child. [Item 6 - amend subsection 29(2)]
18.14 The proposed amendments will not affect an eligible carer's ability to apply for an administrative assessment seeking payment of child support from the paying parent. However, the existing provisions are modified to reflect that either the paying parent or an eligible carer may apply for an administrative assessment of child support. [Item 1 - insert new definition of "carer application" in section 5; Item 4 - repeal section 25 and insert new section 25]
18.15 As a result of these changes, consequential amendments are required to provisions in the Assessment Act to reflect that both parties will be able to lodge applications and also obtain an evidentiary certificate as to that fact from the Registrar. [Item 3 - repeal paragraph 23(b) and insert new paragraph 23(b); Item 17 - amend paragraphs 153(c) and (d)]
18.16 Further consequential amendments are required where some provisions are now only applicable to applications made by an eligible carer. [Item 16 - amend subsection 139(1), Item 10 - amend subsection 106(1); Item 13 - amend subsection 107(1)]
18.17 Where a carer application is made the applicant will be called the "carer entitled to child support" and the person from whom the application sought payment of child support will be called the "liable parent". [Item 7 - repeal paragraph 31(1)(a) and insert new paragraph 31(1)(a)]
Applications where there are joint carers or child is under child welfare law
Joint carers
18.18 The proposed amendments provide that if a child is cared for jointly by two or more persons only one of the eligible carers at any one time may apply for an administrative assessment of child support to be paid for the child. If one of the joint carers is a parent of the child the application must be made by that carer or on behalf of that person. [Item 4 - insert new subsections 26(1) and (2)]
18.19 A paying parent may apply for an administrative assessment, seeking to pay child support for a child who is cared for jointly by two or more persons. If the paying parent makes such an application they must nominate only one of those carers as the eligible carer they are seeking to pay. If one of the joint carers is a parent of the child the paying parent must nominate to pay the joint carer who is the parent. [Item 4 - insert new subsections 26(3) and (4)]
Carer under child welfare law
18.20 If an eligible carer applies for an administrative assessment of child support for a child who is under a child welfare law, the eligible carer making the application must be a parent or relative (such as a grandparent, aunt or uncle) of the child. [Item 4 - insert new section 26A(a)]
18.21 If a paying parent applies for an administrative assessment, seeking to pay child support for a child who is under a child welfare law to an eligible carer, the application must be to pay an eligible carer who is a parent or relative (such as a grandparent, aunt or uncle) of the child. [Item 4 - insert section 26A(b)]
18.22 If the Registrar rejects a liable parent application by a paying parent seeking to pay child support to a person, the paying parent may apply to a court with jurisdiction under the Assessment Act for a declaration that they were entitled to an administrative assessment. If the court is satisfied that the applicant was entitled to make an application then the court may make the declaration. [Item 12 - insert section 106A]
18.23 Currently, where the Registrar makes an assessment under which a registrable maintenance liability arises, the Registrar immediately registers the liability, unless the eligible carer elected not to have the liability enforced in their application for child support.
18.24 The proposed amendments to the Registration and Collection Act will provide that where a liable parent application is made and an assessment is raised, the Registrar will not automatically register the liability. [Item 18 - insert paragraph 24A(2)(c)]
18.25 The proposed amendment to the Registration and Collection Act will allow the eligible carer to apply to the Registrar for registration of the maintenance liability. [Item 19 - insert subsection 28(1A)]
19.1 Schedule 19 of the Bill will amend the Social Security Act 1991 (the Social Security Act) so that 50% of any child maintenance paid by a paying parent will be deducted from their Family Allowance income when calculating entitlement to Family Allowance.
19.2 The purpose of the amendments is to address a current inequity in the Family Allowance system and to reduce the financial stress particularly suffered by low income families paying child maintenance.
19.3 Adoption of the amendments will provide a more accurate reflection of a paying parent's income at the disposal of their subsequent family for Family Allowance purposes.
19.4 On 1 July 1998 and will not apply in relation to Family Allowance payments made before 1 July 1998.
19.5 Currently, any child support received by a parent in receipt of more than the minimum rate of Family Allowance is counted under the maintenance income test and may reduce their Family Allowance. However, any child maintenance paid by a Family Allowance recipient (or their partner) is not deducted from their income.
19.6 Where a paying parent forms a new family where there are dependent children, the household may be entitled to Family Allowance. However, any child maintenance paid by the paying parent is not taken into account when determining the family's entitlement.
19.7 Overall, this has led to a view that there is double counting by the Commonwealth:
• in respect of a paying parent - the paying parent's taxable income is used to assess their new family's eligibility for Family Allowance without regard to the fact that the child maintenance has been paid
• in respect of the person receiving the child maintenance (usually, the other parent of the child) - the child maintenance paid out is also assessed under the Family Allowance Income Test.
19.8 The proposed amendments go some way to meeting the Recommendation 141 of the Joint Committee that 100% of child maintenance paid be deducted from family income when calculating entitlement to Family Allowance.
19.9 Point 1069-H1 in Module H of the Family Allowance Rate Calculator in Part 3.7 of the Social Security Act provides that a person is subject to the Family Allowance Income Test set out in Submodule 3 of that module, unless the person, or the person's partner, is receiving a social security pension, a social security benefit, a youth training allowance or a service pension.
19.10 Point 1069-H23 sets out the method statement to be used in working out whether a person satisfies the Family Allowance Income Test.
19.11 Step 2 of Point 1069-H23 sets out how to calculate the person's "Family Allowance Income" for a tax year. Currently, it is the sum of specified classes of income in a person's "appropriate tax year".
19.12 The proposed amendment will repeal the existing step 2 and insert new steps 2, 2A and 2B so as that in future, the person's Family Allowance income will take account of any "deductible child maintenance expenditure". [Item 4 - repeal step 2 of the method statement and insert new steps]
19.13 The proposed amendments will provide in new point 1069-H34 that a person incurs "child maintenance expenditure" if:
• the person (the payer), or their partner makes payments or provides benefits to another person (not the payer or their partner)
• the payment or benefits are paid or provided for the maintenance of a natural or adopted child of the paying parent or the paying parent's partner. [Item 5 - insert point 1069-H34]
19.14 The amendments will also provide how to value the amount of a payment made or a benefit provided. [Item 5 - insert new points 1069-H35, 1069-H36, 1069-H37, 1069-H38]
19.15 The proposed amendments provide that if a person incurs an amount of child maintenance expenditure during the "appropriate child maintenance year", their "deductible child maintenance expenditure" will then be 50% of their "child maintenance expenditure". [Item 5 - inserts new points 1069-H33]
19.16 For Family Allowance purposes, the rate of payment made to a person in a calendar year is normally based on the person's taxable income for the financial year ended 30 June before the beginning of the calendar year (the "base tax year"). For example, the base tax year for the calendar year 1998 is the year ending 1997. In certain circumstances a person can have the rate of their Family Allowance payable in a calendar year calculated on an estimate of their taxable income in the current tax year. The tax year used is known as the person's "approximate tax year".
19.17 Similarly, for the purposes of calculating a person's "child maintenance expenditure", the proposed amendments provide that the "appropriate child maintenance expenditure year" for a Family Allowance payday will be the base tax year for that payday unless the person requests in writing that the Secretary use the tax year that is current at the time the person makes the request. Item 3 - insert new points 1069 - H22A, H22B, H22C and H22D
19.18 If the person makes a request to use the current tax year, a person's "child maintenance expenditure" will necessarily be an estimate rather than a verifiable amount at that time. The Secretary may only agree to the person using an estimate if the person agrees that their rate of Family Allowance is to be recalculated and the estimate they provide turns out to be more than 110% of the child maintenance expenditure that they actually incur. This will provide an inbuilt inhibiting factor against people trying to overinflate estimates of "child maintenance expenditure". [Item 2 - insert section 886A in new subdivision EA of Division 9 of Part 2.17]
19.19 The proposed amendments will modify the relevant debt recovery provisions of the Social Security Act (subparagraph 1223(3)(b)(iii) and paragraph 1223(3)(b)) to allow debt recovery where there has been an overestimate of child maintenance expenditure and as a result of the over estimation, a person's rate of Family Allowance has been recalculated. [Item 6 - amend subparagraph 1223(3)(b)(ii); Item 7 - insert subparagraph 1223(b)(iv) to refer to new section 886A]
19.20 The "appropriate child maintenance expenditure year" used by a person will not need to be the same as their "appropriate tax expenditure year". Section 860 of the Social Security Act provides that if the rate of Family Allowance payable to a person in a calendar year is worked out using the Family Allowance Rate Calculator, then the rate only has to be recalculated if certain events occur. An additional "event" will be created, namely, if the Secretary determines that the appropriate child maintenance expenditure year for the person is the current tax year. [Item 1 - amend paragraph 860(c)]
19.21 These amendments to the Social Security Act will apply to any Family Allowance paydays on or after 1 July 1998. [Item 8 - insert application provision]
20.1 Schedule 20 of the Bill will amend the Child Support (Assessment) Act 1989 (the Assessment Act) to correct errors and out of date references.
20.2 To correct out of date or incorrect references.
20.3 On the day on which the Act receives Royal Assent.
20.4 The proposed amendments contained in this schedule were errors or out of date references which were detected as a consequence of amendments to Schedules 3, 5, 7, 9, 13 and 14.
20.5 The proposed amendment contained in Schedule 3 identified an error in paragraph 35(c) of the Assessment Act which used the singular of "provision" instead of "provisions". [Item 1 - amend paragraph 35(c)]
20.6 The proposed amendments contained in Schedule 5 identified an omitted reference to paragraph 48(da) in paragraph 48(a) of the Assessment Act relating to modifications to the basic formula. [Item 2 - amend paragraph 48(a)
20.7 The proposed amendments contained in Schedule 7 identified an incorrect reference in section 91A of the Assessment Act to 1069-D11 (a reference in the Social Security Act 1991). The correct reference is 1069-K3. [Item 5 -amend subsection 91A(3) ]
20.8 The proposed amendments contained in Schedule 9 identified incorrect cross references to section 67M(6) of the Family Law Act 1975 instead of to section 67N(1) of the Family Law Act 1975. [Items 8 & 9 - amend subsection 150(9) of the Assessment Act and subsection 16(9) of the Registration and Collection Act]
20.9 The proposed amendments contained in Schedule 13 detected a typographical error of "or" instead of "of" which does not accurately reflect the purpose of the section. [Item 6 - amend subparagraph 98D(1)(f)(ii); Item 7 - amend subparagraph 118(1)(f)(ii) and paragraph 118(1)(g)]
20.10 The proposed amendments contained in Schedule 14 also highlighted out of date references in sections of the Assessment Act. [Items 3 and 4 - amend subsection 56(3), subsection 58(1)(b) and subsection 58(1A)(b)]