Maintenance Income Test (MIT) for ABSTUDY and Youth Allowance (YA) 108-02040000

Dependent customers who are subject to the Parental Means Test and the personal income test will have their rate of payment determined by the test that results in the greatest reduction of their payment.

The Parental Means Test consists of two tests:

• Parental Income Test (PIT)
• Maintenance Income Test (MIT)

These tests are calculated based on the parent(s)/guardian(s) financial circumstances and reduce the customer’s rate of payment by one of the following:

• PIT reduction amount
• Maintenance Income Test Reducible Amount (MRA), or
• Maintenance Income Test Notional Reduction (MITNR)

The parental means test does not apply to ABSTUDY or YA customers who satisfy the independence criteria.

The Maintenance Income Test (MIT) assesses maintenance income received for the purpose of supporting the individual dependent customer. Other maintenance income received by the parent in respect of other dependent children is not counted in this test.

The MIT may be applied to dependent ABSTUDY Living Allowance (aged 16 and over) and Youth Allowance customers unless they are exempt from the MIT.

Prior to 1 January 2019, the MIT also applied to ABSTUDY Living Allowance (aged under 16), School Fees Allowance Group 2 and Assistance for Isolated Children (AIC) Additional Boarding Allowance.

From 1 January 2020, the MIT will not be applied where ABSTUDY Living Allowance or Group 2 School Fee Allowance and FTB is being received simultaneously. The MIT will apply to the FTB payment for the child.

The MIT may be applied to a relevant period (any period within a financial year a customer or their parent(s)/guardian(s) are entitled to receive maintenance income from a paying parent). A customer will not be subject to the MIT where there is no entitlement to maintenance income.

Maintenance income is financial support given from a non-custodial parent to:

• the custodial parent the child is dependent upon, or
• the child

Maintenance income can include any of the following:

• cash payments
• lump sum payments and non-cash benefits
• food or clothes
• payments made to another person or organisation on a person's behalf
• loan repayments, rates, insurance, household expenses, childcare fees or school fees, and
• payment made directly to the ABSTUDY (16 and over) or Youth Allowance customer
• Capitalised maintenance

Capitalised maintenance is maintenance income provided by a lump sum payment or, transfer of an asset or, a property settlement where the value exceeds $1500. To be assessed as maintenance income, it must be provided specifically for child support. For MIT, it is the responsibility of the customer, parent/guardian to advise Services Australia when capitalised maintenance is received. Capitalised Maintenance applies to MIT from the date it was received and ends when the child turns 18 years unless a different period is indicated in a court order or an agreement.

Maintenance income can be received through:

• a Child Support Assessment
• Voluntary Maintenance - Voluntary maintenance will only be included in the MIT where no child support assessment has been made
• Capitalised maintenance - Capitalised maintenance will be included in the MIT in addition to child support assessment or voluntary maintenance

To determine the amount of maintenance income received, any amount of capitalised maintenance received, during the relevant period, will be added to the CSA or Voluntary amounts received to get the total amount of maintenance income received.

A relevant period is the total of all periods within a financial year a customer or their parent(s)/guardian(s) are entitled to receive maintenance income from a paying parent. For voluntary maintenance income the relevant period begins on the date the maintenance income commences and ends the day the maintenance income stops.

Maintenance income is used to calculate the customer’s rate of payment during a relevant period.

Maintenance income is always converted to an annual amount using either the entitlement or disbursement method. The method will depend on if a Child Support assessment has been made, the method of collection requested and if the person has elected the disbursement method.

The entitlement method will be used where a child support assessment has been made and:

• the person has elected to collect maintenance income privately, or
• the person has elected the entitlement method and requested Child Support to collect maintenance income, or
• when there is a voluntary maintenance arrangement

The disbursement method will be used where a child support assessment has been made and both:

• the person has elected Child Support to collect maintenance income, and
• they have elected the disbursement method

Note: this is recorded on the applicant/parent/guardian’s record.

Entitlement method calculation:

• the current entitlement amount is used as the annual maintenance income
• if child support entitlement varies, annual maintenance income is recalculated and, under the Entitlement Method, includes:
• each entitlement amount (or actual voluntary maintenance income amount) apportioned for the period it applies: entitlement X number of days / 365
• an estimate for the remainder of the income year: entitlement X number of days / 365

These amounts are added together and then annualised.

Disbursement method calculation:

• all Child Support disbursements received so far in the financial year, plus
• the lower of:
  current month or previous month disbursements (whichever is the higher amount) X number of months left in the financial year
  or
  one twelfth of the current annual entitlement X number of months left in the financial year, plus
• for previous private collection periods in the financial year, the annual entitlement apportioned for the period each applied

The annualised maintenance is then calculated as follows:

• total maintenance income from payer X 365 / number of days the customer is entitled to receive maintenance income from the payer in the financial year (relevant period or periods)

The MIT is made up of:

• MIT Reducible Amount (MRA)
• PIT Reduction Amount (PITRA) - if the PITRA is more than the MRA the PITRA will reduce the customer's payment
• MIT Result
• MIT Notional Reduction (MITNR)

To calculate the customer's MIT result, firstly calculate the annualised maintenance income as above. Then calculate the customer's Maintenance Income Free Area (MIFA). Their MIFA is calculated based on who in the family receives or attracts maintenance income:

• where the annual maintenance income is less than their MIFA, the MIT result is nil, or
• where the annual maintenance income is more than their MIFA, the MIT result is calculated (annual maintenance income – MIFA) X 0.5 / 26

To calculate the Customer's MITNR the MIT result is added to the PITRA.

The lower of the MITNR and the MRA reduces the customer's Maximum Payment Rate (MPR).

Note: for calculation of the PITRA see Applying the Parental Income Test (PIT) for ABSTUDY and Youth Allowance or Applying the Parental Income Test (PIT) for Assistance for Isolated Children (AIC) Scheme.

The Dependent Youth Maintenance Income (DYMI) screen in Process Direct displays the annual maintenance amount currently being used and all historical end dated maintenance amounts. If there is a current child support assessment in place, the most recent entry on DYMI will display the following:

• Maintenance Amount - the maintenance amount (provided by child support)
• Frequency - ANN (annual)
• Annual Maintenance amount - the annual maintenance amount being used for the maintenance income test assessment
• Type - CSA

Where a current child support annual assessment is in place, it is possible for ‘one time’ child support maintenance payments to be made at the same time. These onetime maintenance amounts will be displayed on DYMI with a frequency of (ONE) and the amounts will be automatically included as part of the annual maintenance income test assessment.

If the most recent entry on DYMI displays an annual maintenance amount of $0 (zero), this indicates there is no current child support assessment in place and the child support agreement has ended.

Voluntary maintenance is a private agreement where the payer agrees to pay the payee (the PIT linked parent) maintenance for the dependent youth customer. Voluntary maintenance and any changes to the arrangement, must be advised to the agency by the customer, parent or guardian. A current child support arrangement will supersede the voluntary arrangement and the system will automatically end date the voluntary arrangement if a child support assessment is received. The voluntary arrangement will not be re-instated when the child support assessment ends, and the customer or parent or guardian must advise the agency if a new voluntary agreement is arranged.

Child Support, Voluntary and Capitalised maintenance income can be viewed in:

• Process Direct:
• Dependent Youth Maintenance Income (DYMI) table on the DYMI screen
• Customer First:
• Maintenance Income ABY/AIC/YA guided procedure

The Maintenance Income Test results are displayed in:

• Process Direct:
• Select the MIT Youth icon to see the NSS Maintenance Assessment Explanation table
• Activity List (MITSUMMARY) screen
• Dependent Youth Rate Summary (DYRSUMM) screen
• NSS Period Rate Explanation (NREX) screen (YA only)
• Customer First:
• Dependent Youth Rate Summary (!DYRSUMM)
• NSS Period Rate Explanation (NREX) screen (YA only)

For some customers, child support maintenance income information is also viewed on:

• the Maintenance Entitlement Group Summary (MNGS) screen in the parent(s)/guardian(s) record. For more details. See Where to find child support information on Centrelink systems

Voluntary maintenance income can be recorded in:

• Process Direct:
• In the Dependent Youth Maintenance Income (DYMI) table on the DYMI screen
• Customer First:
• For a change in circumstance, on the Maintenance Income ABY/AIC/YA guided procedure

Capitalised maintenance income can only be recorded in Process Direct on the DYMI table.

Child support maintenance income cannot be manually recorded as it is provided by Child Support.

Annual maintenance income is estimated based on a Child Support assessment, voluntary and capitalised maintenance income over the financial year. Any changes to maintenance income during the financial year applies from the date paid to plus one day, regardless of when the change occurred.

Maintenance income reconciliation occurs after the end of the financial year and uses actual maintenance income and the date of event of any changes. For more details see Maintenance income reconciliation for ABSTUDY, Assistance for Isolated Children Scheme (AIC) and Youth Allowance (YA).