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| CSA's previous online law & policy guide Effective until 30 June 2008 |
2.6.17: Would a change be just and equitable?Context Any change made to an assessment must be fair to the children and the parents. Legislative references Sections 3, 98C, 98S, 112 and 117 Child Support (Assessment) Act 1989 Section 4 Family Law Act 1975 Regulation 12A Family Law Regulations 1984 Explanation While the legislation uses the terms 'just and equitable' and 'unjust and inequitable' CSA frequently uses the terms 'fair' and 'unfair' when discussing these concepts. CSA must be satisfied that it would be just and equitable as regards the child, the liable parent, and the carer entitled to child support before a decision to change the assessment is made (section 98C(1)(b)). CSA will consider whether it is 'just and equitable' to make a particular decision after a reason for a change to the assessment has already been made out (section 117(4)). In deciding whether a decision is fair CSA will consider the amount and duration of any proposed change and the factors listed in section 117(4) of the Assessment Act which are relevant to a particular case. CSA may give more weight to some factors than to others depending on the case. The factors include:
The term 'unjust and inequitable' or 'unfair' is associated with four of the reasons for a change of assessment (reasons 4, 5, 8 and 10). Before each reason can be established the administrative assessment must result in an unfair level of child support. This may seem to be duplicated by the need to consider if a decision is fair but it is necessary to establish that an assessment is unfair section 117(2)(c) considering whether a change to the assessment would be just and equitable. For those four reasons it must first be found that the current assessment is unfair so that the reason is established. CSA then needs to consider whether a proposed decision is both 'just and equitable' and 'otherwise proper'. Where parents have agreed on a particular child support liability CSA is likely to be satisfied that a change to the assessment which reflects this agreement will be just and equitable. However CSA must still decide whether the proposed change is 'otherwise proper'. The duty of a parent to maintain a child and the proper needs of the child In deciding whether it is appropriate to change an assessment CSA must consider the parent's duty to support their child. The duty to support a child applies to all the children of a parent equally. All the children of a parent have equal priority and the Assessment Act does not discriminate between the children of different relationships. CSA must consider the proper needs of the child and must have regard to 'the manner in which the child is being, and in which the parents expected the child to be, cared for, educated or trained and any special needs of the child' (section 117(6)). Not only are the basic costs of maintaining a child considered but the individual issues of the child are also taken into account. Not all of the reasons for a change to an assessment are based on the needs of the child. However, in deciding whether a change is fair CSA must consider the proper needs of the child in all cases even if the reason stated in the application is not based on the needs of the child. In making a decision the fact that a child or carer is receiving an income-tested pension, allowance or benefit must be disregarded (section 117(7)). Income, earning capacity, property and financial resources of the parents and the child A formula assessment of child support is based on the taxable income of the parents. A much wider examination of the financial resources of the individual is made when CSA considers a change to an assessment. The income, earning capacity, property and financial resources of both parents and the child are taken into account when CSA considers if it would be fair to change the assessment. This includes any assets owned by or under the control of, or held on behalf of either parent or the child, even where they do not produce income. See reason 8 for more information. This means that, while the individual is entitled to arrange their financial affairs in any legal way, their obligation to pay child support or contribute to the care of their child should not be reduced as a result of those arrangements when considering any of the reasons for a change of assessment. Once the income, earning capacity, property and financial resources have been identified CSA will consider the extent to which they should affect the assessment. When deciding if a change to an assessment is fair, a parent's actual income in the relevant period is considered, as well as the child support income amount used in making the child support assessment. If a parent's income has changed significantly then this may be a factor in deciding if a change should be made. If the payee is not a parent of the child for whom child support is payable, that payee has no legal duty to support the child. CSA will therefore not take into account a non-parent payee's income, earning capacity, property or financial resources when considering whether a change to the assessment is fair. Income that is not considered In deciding if a change to the assessment is fair, CSA is required to disregard 'any entitlement of the child, or the payee to an income tested pension, allowance or benefit' (section 117(7)). Direct and indirect costs of providing care for the child and other considerations In deciding whether a change to an assessment would be fair CSA must consider the direct and indirect costs incurred by the payee in providing care for the child (section 117(4)). In most cases direct costs can be identified and can be independently confirmed. Indirect costs to the carer in providing care are more difficult to evaluate. The earning capacity of a payee may be restricted by the need to provide care for a child. Issues such as missed overtime, additional hours of potential employment outside school attendance or inability to undertake required travel in a better paid job may be identified. Once costs have been determined, CSA will consider to what extent the costs affect the position of the payee. Example If a payee's direct and indirect costs are low they might not
be considered to significantly affect the payee and therefore not affect any
decision to change the assessment.
CSA may also consider other relevant matters apart from those listed in subsections 117(4) to 117(8) (section 117(9)). These other matters are not set out in the legislation but should be consistent with the objects of the Assessment Act. Example If other proceedings in a court likely to affect child
support have been, or are likely to be, commenced, e.g. property settlement
proceedings, CSA may decide that it would not be fair to change the assessment
if such proceedings are in progress.
Hardship caused by the making or refusing to make a change to the assessment CSA must consider any potential hardship that would be caused to the child and either parent as well as any other child of either parent, when deciding if a change to an assessment would be fair (section 117(4)(g) and (h)) or when refusing to make a decision. CSA will consider whether the decision limits the capacity to provide necessities for general living or to meet the proper needs of all parties individually and in the family situation. If the payee is not a parent of the child for whom child support is payable,
that person has no duty to support that child. CSA will not collect information
about that person's income, earning capacity, property or
financial resources, and will not consider whether a change, or refusal to
change the assessment would cause that person hardship. Date of effect When making a change of assessment decision, CSA may not vary the rate of child support payable for a day earlier than 18 months before the date upon which the application was lodged (if the payer or payee applied for the change of assessment) or the date upon which CSA notified the payer and payee in writing of its intention to change the assessment (in the case of a CSA-initiated change of assessment (section 98S(3B)). The exception is where a court has granted leave under section 112 for CSA to make a retrospective change to the assessment for the period specified by the court in the order granting leave (sections 98S(3C) and 112(6)). However, CSA is not obliged to make a change to the assessment for the period the court has granted leave (section 112(8)). Apart from this limitation on backdating a decision, CSA has a wide discretion to specify the date of effect of that change. Backdating a decision for any period could result in an overpayment to the payee or arrears payable by the payer. This could cause hardship to that person and may put the ongoing financial support of the child in jeopardy. When considering whether to backdate a change of assessment decision, CSA will consider the circumstances of the parties involved. These include, but are not limited to:
CSA will also consider the circumstances that led to the application, for example:
Version 1.4 Issued 1 January 2007 |
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