Effective until 30 June 2008
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| CSA's previous online law & policy guide Effective until 30 June 2008 |
2.6.4: Kinds of change of assessment decisionsContext The Assessment Act lists the types of decisions CSA can make when changing an assessment. Legislative references Sections 59, 60, 74, 98C, 98S, 112, 119, 151B, 151C and 151D Child Support (Assessment) Act 1989 Regulation 9 Child Support (Assessment) Regulations 1989 Explanation The types of decisions that can be made How long should a decision apply? Limiting administrative options Decisions that are income amount orders Can CSA change a child support assessment affected by a child support agreement or a court order? What happens if there is a terminating event after CSA makes a change of assessment decision? Amending an assessment subject to a change of assessment decision What happens if a court order is made where a change of assessment is in force? The types of decisions that can be made Where CSA is satisfied that a reason exists and that it would be just and equitable and otherwise proper to change an assessment it can make a decision to change the assessment. CSA can:
If CSA is satisfied that a change should be made it must make a decision that changes the assessment to better account for the special circumstances of the case. CSA can decide the appropriate level of child support in that case. The decision is not limited to reasons claimed in the application and may be different to the change requested (section 98S(2)). CSA's decision is not limited to reasons claimed in the application and may be different to the change requested (section 98S(2)). CSA can make a decision that has the opposite effect to the change requested. This is referred to as a contrary decision. CSA can either increase or decrease the amount payable. The legislation does not define the circumstances in which CSA would consider making a contrary decision. However, it can only do so where satisfied that at least one of the 10 change of assessment reasons exist, and where a change would be just and equitable and otherwise proper. If CSA believes that a contrary decision should be made, it will give the applicant and respondent an opportunity to comment upon the information that may lead to a contrary decision. Examples Example one
F, a payee applies for an increase to the child support assessment payable by M, the payer because of the costs associated with the special needs of the child A. CSA finds that F has some extra costs because of the A special needs, however, it also finds that M's income has recently reduced, and the assessment is now unfair because of M's income. After discussing the circumstances with both parents, CSA decides to reduce the child support assessment. Example two
M, a payer, is retrenched from a long term position. After several months, M has some part-time work and also receives a Centrelink benefit. M lodges an estimate of income for the remainder of the child support period, which is an annualised amount of $15,000. CSA reduces M's assessment from the date of M's estimate. M owes $2,000 in arrears of child support. M applies for a reduction to the child support assessment for the period between the date of retrenchment and the date the estimate took effect. In addition to M's part time income of $100 per week, M has $85,000 invested in a term deposit, and has recently paid off the mortgage on the home which was purchased after separation. F, the payee, has sole care of their three children A, B, and C. F is unemployed, and lives in public housing. CSA finds that although M's income has reduced, M has significant financial resources, and that M could make an increased contribution to the support of A, B and C, by drawing on those resources. After discussing the circumstances with both parents, CSA decides not to reduce M's arrears, and to increase the child support assessment for the next 12 months. How long should a decision apply? CSA cannot make a change of assessment decision that affects the child support assessment payable for a day that is more than eighteen months before the date upon which a parent lodged their change of assessment application (section 98S(3B)(a)). In the case of a CSA-initiated change of assessment, CSA cannot make a change of assessment decision that affects the child support assessment payable for a day that is more than eighteen months before the date CSA notified the payer and payee in writing of its intention to change the assessment (section 98S(3B)(b)). If a court has granted leave under section 112, CSA can 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)). The reasons for a change of assessment may help to determine the duration of a decision. But other factors will also be considered in deciding how long the change of assessment should apply. CSA will make a decision that produces an appropriate change to the assessment and if possible allows for future changes in circumstances to be assessed without the need for a further application to change the assessment. If it is likely that future events may affect the assessment it is best to make a decision for a shorter period. To provide as much certainty and consistency for parents as possible CSA will make decisions which cover the longest period possible, having regard to the circumstances of the case. CSA will take into account the beginning and end of child support periods when making a decision. Limiting administrative options Some change of assessment decisions can limit the administrative options available to parents if their circumstances change. CSA will try to make a decision that makes an appropriate change to the assessment and has sufficient flexibility to respond to later changes in circumstances. CSA will take into account:
Decisions that are income amount orders A decision to change the formula assessment may be an 'income amount order' in relation to one or both parents (section 59). A parent cannot elect to have their child support assessment based on their estimated income if an income amount order is in force for any part of a child support period (section 60(2)). If the child will turn 18 in the final year of secondary education, the payee can apply to CSA to extend the assessment to the end of that school year (sections 151B, 151C and 151D). When CSA makes a change of assessment decision, it will consider if the provisions of sections 151B and 151C are relevant. If so, CSA will express the decision to have effect until a terminating event occurs in relation to the child rather than the day before the child's 18th birthday. The change of assessment decision will then continue to apply to the child support assessment after the child's 18th birthday, if the assessment is extended until the end of the school year. Can CSA change a child support assessment affected by a child support agreement or a court order? CSA can make a change of assessment decision for any case where there is a child support assessment in force. This includes a case where the assessment has ended (where the assessment remains in force for the days before the terminating event). However, CSA cannot vary the terms of a court order or child support agreement in any circumstances. If CSA's change of assessment decision conflicts with the terms of a court order or child support agreement, the conflicting provisions of CSA's decision will have no effect. When a court makes an order that affects a child support assessment CSA must:
When CSA accepts a child support agreement it must:
If the provisions of a court order and a child support agreement conflict, CSA must give effect to the more recent provisions in any child support assessment (sections 95(5) and 98(1)). If a court order or child support agreement affects a child support assessment, CSA can change that assessment by varying any component of the formula that is not set by the agreement or order. Example M and F have a child support agreement that varies the child
support percentage. M applies for a change of assessment because F's income has
increased. CSA makes a change of assessment decision that varies F's child
support income.
Example M and F have a court order that sets F's annual rate of child
support. CSA cannot change M and F's child support assessment in any way.
What happens if there is a terminating event after CSA makes a change of assessment decision? If the assessment ends because of a terminating event A child support assessment ends when a terminating event occurs and there are no longer any eligible children. This also applies to an assessment subject to a change of assessment decision. If CSA later accepts an application for a child support assessment for that case (e.g. if the payee reapplies when the child returns to their care) it will make a child support assessment using the usual formula provisions, without regard to the change of assessment decision. The payer and payee are both able to apply for a change of assessment if they believe the child support assessment is unfair and special circumstances apply. If the assessment continues after a terminating event A child support assessment will continue if there is a terminating event for one child, but there are other eligible children of the assessment. Where CSA's child support assessment is in accordance with a change of assessment decision it will amend the assessment to give effect to the terminating event for the child. See below for information about the way CSA will amend an assessment subject to a change of assessment decision. That same child may return to the payee's care within the period affected by the change of assessment decision. If the payee applies to have the child included in the assessment, CSA will add the child, and amend the assessment by reference to the change of assessment decision. What happens if there is a change of circumstances that affects the annual rate of child support after CSA makes a change of assessment decision? CSA can amend a child support assessment to give effect to a change of circumstances that affects the annual rate of child support. Where CSA's child support assessment is in accordance with a change of assessment decision it will amend that assessment to give effect to a change of circumstances that affects the annual rate of child support. For example, if the SCO made a decision to set the payer or payee's child support income amount, CSA can continue to use that new child support income amount to calculate the rate of child support for any additional children who are added to that case after the COA decision. See below for information about the way CSA will amend an assessment subject to other types of change of assessment decision. Amending an assessment subject to a change of assessment decision A change of assessment decision that sets the annual rate of child support does not prevent CSA from amending the assessment to give effect to the happening of a terminating event, or a change of circumstances that affects the annual rate of child support (section 74). CSA will amend an assessment by applying the normal formula adjustment under the Assessment Act, provided that this is consistent with the change of assessment decision. CSA will do this by:
Example CSA makes a change of assessment decision that sets M's
annual rate of child support payable for A to F at $5,000.
M subsequently advises CSA of the birth of their new child B, who is M's relevant dependant. CSA's change of assessment decision did not take into account the fact that M's family was expecting another child. CSA calculates the appropriate reduction using the above steps:
There are no such adjustments.
The child support percentage for one child is 18%. The exempted income for a payer without a relevant dependent child is $13,462. The annual rate ($5,000) is equal to (notional CSIA - $13,462 x 18%). Notional CSIA = ($5,000/0.18) + $13,462 Notional CSIA = $41,240
The exempted income for a payer with one relevant dependant under 13 is
$24,842 (i.e. $22,480 + $2,362).
There are no such adjustments. Therefore the amended annual rate will be $2,952. However, if the change in circumstances was foreseen and taken into account in the change of assessment decision, it is not necessary for CSA to further amend the assessment. Example M advises CSA that they have a child from a new relationship.
M is a payer whose child support assessment is set at a fixed annual rate by
CSA's change of assessment decision.
The Senior Case Officer who made the change of assessment decision was aware that M was expecting a new child and took this into account in fixing the annual rate of child support. CSA decides that it is not necessary to amend the assessment further to give effect to M's change of circumstances. Example M is a payer with a child support assessment payable to F for
3 children (A, B and C). F applied for an increased assessment on the basis of
the high costs associated with B's special needs. CSA increased the assessment
from $3,000 to $5,000.00 per annum.
A turns 18 and is no longer an eligible child. CSA amends the assessment to give effect to this terminating event CSA does this using the above steps:
CSA subtracts the $2,000 relating to B's special needs. The notional annual amount is $5,000 - $2000 = $3,000.
The child support percentage for 3 children is 32%.
The notional annual rate is therefore ($22,837 - $13,462) x 27% = $2,531.
As B is still an eligible child, CSA adds the $2,000 relating to B's special needs. Therefore the amended annual rate will be $4,531. Example If there was a terminating event for B instead, and A and C
were the only eligible children, the calculation will be as follows:
CSA subtracts the $2,000 relating to B's special needs. The notional annual amount is $5,000 - $2000 = $3,000.
The exempted income for a payer without a relevant dependent child is $13,462. The annual rate ($3,000) is equal to (notional CSIA - $13,462 x 32%).
The child support percentage for 2 children is 27%
B is no longer an eligible child, so CSA does not add the $2,000 relating to B's special needs. Therefore the amended annual rate will be $2,531. Example If A, B and C are all still eligible children, but M becomes
liable to pay child support to another payee, J, for their child D. M is now
liable to pay child support to 2 payees (F and J) for a total of 4 children (A,
B, C and D).
CSA makes a new assessment according to the usual formula provisions for D, payable to J. CSA must also amend M's child support assessment payable to F for the 3 children A, B and C in accordance with the modified formula provisions for a payer liable to pay child support to more than one payee CSA will do this by applying the above steps:
CSA subtracts the $2,000 relating to B's special needs. The notional annual amount is $5,000 - $2000 = $3,000.
The exempted income for a payer without a relevant dependent child is $13,462.
Child support percentage for 3 children: 32%. Child support percentage for 4 children: 34%. Modified child support percentage: 3/4 of 34% = 25.5%. (For a payee who has 3 eligible children in a child support assessment payable by a payer who has child support assessments for a total of 4 children) ($22,837 - $13,462) x 25.5% = $2,391 (rounded to nearest whole dollar)
CSA adds the $2,000 relating to B's special needs. Therefore the amended annual rate will be $4,391. The payer and payee are both entitled to object to the particulars of CSA's amended assessment, or to CSA's decision to refuse to amend an assessment. CSA will advise both parents in writing of its decision and their right to object. What happens if a court order is made where a change of assessment is in force? Although departure orders and child support agreements take precedence over decisions to change an assessment, this does not necessarily mean that CSA must cease giving effect to decisions currently in force. CSA must give effect to the order or agreement, if necessary by amending the assessment. The provisions of the order or agreement replace any conflicting provisions of CSA's change of assessment decision. Any provisions in CSA's change of assessment decision that are not in conflict with the order or agreement will continue to apply. Version 1.4 Issued 1 January 2007 |
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