Maintenance Income Test (MIT) reconciliation for ABSTUDY, Assistance for Isolated Children Scheme (AIC) and Youth Allowance (YA) 108-17031700

Actual Income maintenance received

Where the parent(s)/guardian(s) have a child support assessment and have elected private collect, they are deemed to have received their total entitlement for any private collect periods.

Where voluntary maintenance has been recorded, parent(s)/guardian(s) are deemed to have received the full amount recorded.

The system checks if, in the previous financial year, the customer:

• was maintenance income tested for any period in the relevant financial year
• was not maintenance income tested, but there has been a backdated child support assessment for a private collect recipient or backdated voluntary maintenance

Relevant financial year

The system calculates the actual maintenance income received for the relevant financial year period.

Each relevant period starts from the earliest of:

• 1 July of the relevant financial year
• the date the child support assessment starts (if after 1 July of the relevant financial year), or
• the date a change in child support assessment occurs

Each period stops on either:

• 30 June of the relevant financial year
• the day before a change in the child support assessment
• the day before the customer’s parent(s)/guardian(s) elect Child Support collection, or
• the date the child support assessment ends (if before 30 June of the relevant financial year)

Private collect and voluntary maintenance

The system calculates private collect and voluntary maintenance periods separately and then adds them to the disbursements received during the financial year.

For each period of private collect and voluntary maintenance, the system calculates the period amount:

• (annual entitlement X number of days in the period / 365 (366 for a leap year)

Actual maintenance income (AMI)

The system adds the amounts for periods of private collect and voluntary maintenance with all disbursements received by adding:

• disbursements received through the relevant financial year
• child support entitlement for periods of private collect
• entitlement for periods of voluntary maintenance where no child support assessment exists

This is the AMI received for the financial year.

During the financial year, annual maintenance income is estimated based on a child support assessment or voluntary maintenance income received for the customer (unless they are exempt from the MIT).

Maintenance income reconciliation occurs using the actual maintenance income received for the relevant financial year.

The system reconciles maintenance income in July each year:

• after the final YA or ABSTUDY payment has been made for the previous financial year, and
• where the customer or parent(s)/guardian(s) received maintenance income within the previous financial year

The customer or their parent(s)/guardian(s) are not required to do anything for maintenance income reconciliation to occur. For example, lodge their tax returns or complete a non-lodgement of tax return.

From 1 July 2020 maintenance income reconciliation no longer occurs for ABSTUDY Living Allowance customers aged under 16, ABSTUDY School Fees Allowance Group 2 and Assistance for Isolated Children (AIC) Scheme Additional Boarding Allowance (ABA).

Reconciliation occurs for dependent customers who are:

• current on payment, and have received their income support payment or ABSTUDY for the period that includes 30 June
• suspended, and are either restored or cancelled and have received their payment for the period that includes 30 June, or
• claiming a relevant payment and the claim is backdated to a date in the previous financial year

After reconciliation is complete, a re-reconciliation may automatically occur at any time, due to the below change in circumstances:

• a retrospective change in a private collect child support assessment for a previous financial year. If the retrospective assessment is:
• a decrease - the customer or third party may receive arrears
• an increase - the customer or third party may incur a debt. In this scenario the customer, parent or guardian can apply for a formal review of the re-reconciliation debt with Services Australia. If they want to appeal the retrospective increase to their child support assessment they must contact Child Support
• a retrospective change in sibling circumstance that affects the customer’s maintenance income free area (MIFA). For example:
• parent/guardian’s entitlement to maintenance income for a sibling changes, or
• a sibling who attracts maintenance income starts or stops receiving an income support payment, or
• a sibling who attracts maintenance income enters or leaves care

A backdated reassessment may also result in re-reconciliation.

Reconciliation or re-reconciliation may also occur as a result of a:

• new claim activity
• Benefit Action (BA) restoration
• change in circumstances for the customer

Where an activity by a Service Officer, actioned entirely within Process Direct, causes this to occur, view the provisional activity result in Process Direct on the MITR Reconciliation Summary (MITR) page. It includes any negative or positive adjustments.

The MIT reconciliation results page includes the result details.

To display further information for a financial year, hover over the specific financial year and select [Enter] to display the NSS Maintenance Assessment Explanation page.

If the activity is actioned in Customer First, view the provisional activity results on the activity results screen; they cannot be viewed on MITR.

The system calculates actual MIFA based on the relevant periods.

The system calculates the MIFA share for each period using:

• MIFA X (number of days in the period / number of days in the financial year), then
• adds the MIFA share for each period in the relevant financial year

The result is the actual MIFA.

If the actual maintenance is:

• equal to or more than, but no more than 125% above the actual MIFA, maintenance reconciliation will not occur. Procedure ends here
• less than the actual MIFA, reconciliation may occur after the estimated maintenance income is calculated, go to Step 6
• more than 125% above the MIFA, reconciliation may occur after the estimated maintenance income is calculated, go to Step 6

After the system calculates the actual MIFA and determines reconciliation will occur, it calculates the annual estimated maintenance income.

The system calculates the annual estimated maintenance income by adding all periods of annualised estimated maintenance income as follows:

• the system calculates the estimate for each period by multiplying the amount of the annualised estimate by the number of days in the financial year for which estimate applied / number of days in the financial year, and
• adding all the period estimates in the financial year

If the actual maintenance income is:

• more than 125% above the annual estimated maintenance income, reconciliation will occur, go to Step 7
• less than the annual estimated maintenance income, reconciliation will occur, go to Step 7
• equal to or more than, but no more than 125% above the annual estimated maintenance income, maintenance reconciliation will not occur. Procedure ends here

The MIT is made up of:

• Maintenance Income Test Reducible Amount (MRA)
• Parental Income Test Reduction Amount (PITRA)
• Maintenance Income Test Notional Reduction (MITNR)

Before calculating the MIT, staff must calculate the PIT reduction amount (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

Is the PITRA equal to or more than the Maintenance Income Test Reducible Amount (MRA)?

• Yes, the PITRA will reduce the customer's maximum payment rate. Go to Step 10
• No, go to Step 8

Is the customer exempt from the MIT?

• Yes, the customer's MIT result is nil. The PITRA will reduce the customer's maximum payment rate. Go to Step 10
• No, go to Step 9

Prior to calculating the MIT Notional Reduction (MITNR), the MIT result needs to be calculated. Calculate the MIT result as follows:

• Actual Maintenance Income X 0.5 / 26
• Go to Step 10

To calculate the MIT Notional Reduction (MITNR), the MIT Result and the PITRA must first have been calculated.

Add the MIT Result to the PITRA to get the MITNR.

Is the MITNR equal to or higher than the MRA?

• Yes, the MRA will reduce the customer's maximum payment rate
• No, the MITNR is less than the MRA. The MITNR will reduce the customer's maximum payment rate

Results of reconciliation display under the MIT Reconciliation Summary (MITR) screen via Customer Summary in Process Direct.

Results are not available in Customer First.

Reconciliation will result in either:

• no adjustment - when the actual maintenance income is equal to or more than but no more than 125% of the annualised maintenance income free area or the estimated maintenance income
• positive adjustment - when the actual maintenance income is below the annualised maintenance income free area or the estimated maintenance income. The system will calculate the arrears amount and deliver the arrears payment the next day. The system issues an arrears
• arrears are only paid for the financial year ending before the current financial year. For example, reconciliation occurs for 2019–20 financial year in July 2020, arrears will be paid
• re-reconciliation occurs for 2019–20 financial year in July 2021, arrears will not be paid for 2019–20 financial year
• negative adjustment - when the actual maintenance income is more than 125% of the annualised maintenance income free area or the estimated maintenance income. Where there is a negative adjustment, an undetermined debt activity will be created for investigation, see Step 1 in Table 3

MIT reconciliation (MITRECO) will fail automation, where the activity results in either arrears or a debt, and the adjustment is:

• outside the reconciliation period, or
• is a result of circumstances other than maintenance income

For example, where parental income was updated after the dependent customer’s payment was cancelled, and an adjustment did not occur at the time of cancellation.

Service Officers will be able to identify these activities in:

• Customer First/Customer Record, as ‘YTMITR Trigger Assessment Checker – Investigation required’ YAL/REA or ABY/REA on the customer’s Activity List (AL) screen
• Work Optimiser (WO)/ Workload Management (WLM) as:
• ABSTUDY General, ZIAM_ABY_MIT_RECO with
• Keywords: MITRECO, YTMITR and TACMFU
• Youth Allowance (YA) ZIAM_YAL_MIT_RECO
• Keywords: MITRECO, YTMITR and TACMFU

Note: to ensure the correct keywords are attached, Service Officers can locate these under ‘Work item attributes’ in WLM, see Workload Management.

Where a MITRECO activity is allocated via WLM, go to Step 2.

Review the customer’s record and maintenance income circumstances to determine if the outcome is appropriate.

• Select the MITRECO activity from the AL screen
• Go to the Assessment Results (AR) screen

If the adjustment reflects:

• A positive adjustment (arrears), go to Step 3
• A negative adjustment (debt), go to Step 4

Review the Maintenance Income circumstances, to establish if the arrears are a result of MIT Reconciliation.

Identify the actual Maintenance Income for the parent/guardian via:

• Process Direct:
• MIT Reconciliation (MITR) Dependent

Once the reconciliation result has been identified, make note of the amount, and return to the activity in Customer First (CF).

Are the arrears due to MIT Reconciliation correct?

• Yes,
• Finalise the MITRECO activity
• Record details in a DOC
• Procedure ends here
• No, and:
• There is a discrepancy, for example additional arrears are paying which are not a result of the MITRECO activity, go to Step 5
• The arrears are incorrect, see Payment of arrears after reassessment and stopping a payment

Where the MIT Reconciliation activity has resulted in an overpayment, determine if the overpayment is appropriate.

Identify the actual maintenance income for the parent/guardian via:

Process Direct:

MIT Reconciliation (MITR) Dependent

Once the reconciliation results have been identified, note the amount, and return to the activity in Customer First (CF).

Is the debt outcome correct?

• Yes,
• finalise the MITRECO activity
• record details in a DOC
• procedure ends here
• No, and:
• the debt is not the result of the MITRECO activity, for example, the customer’s payments are incorrectly cancelling for another reason, go to Step 5

Investigate the record to establish why arrears and/or a debt have triggered within the MITRECO activity.

Arrears and/or a debt may be a result of a change in circumstances, for example a failed online study update. Check:

• Benefit Status (XBS): Provisional suspension/cancellation
• Activity List (AL): STArted Activities
• Interaction History: any Change in Circumstance or Reviews For Manual Action
• Document List (DL)

Where a change in circumstance or update to the record is required, the update to the customer’s record must be made within the MITRECO activity:

• select the MITRECO activity from the Activity List (AL) screen
• manually update the customers record with appropriate details
• Finalise the activity via the Assessment Results (AR) screen
• DOC the record

If the activity cannot be Finalised due to error E005AM - Receipt Date can't be more than 1 year in the past for this Source, go to Step 6. Otherwise, procedure ends here.

Where error E005AM - Receipt Date can't be more than 1 year in the past for this Source, is presented on the Assessment and Warning (AWE) screen, when finalising the MIT reconciliation activity:

• CANcel the MITRECO activity via the Activity List (AL) screen
• Update the customers record with any change of circumstance(s)
• Finalise the activity via the Assessment Results (AR) screen
• DOC the record, ensure the financial year being assessed for MIT reconciliation is recorded
• escalate the CRN via MySupport using the Maintenance Income Test (MIT) Reconciliation webform and record the following request in the webform:
• ICT intervention required. Please re-run YTMITR MIT RECONCILIATION trigger for the (insert financial year)
• Activity was cancelled to allow for record correction updates to be made

Once the MITRECO is re-created, the system will automatically complete without manual intervention.

Procedure ends here.

MIT debts are legally recoverable under Social Security (Administration) Act 1999 section 109A.

The MIT reconciliation undetermined debt is the debt activity found on the activity list (AL) screen including the keyword MITRECO.

Service Officers must investigate the undetermined debt, referring to the MIT reconciliation or re-reconciliation total adjustment amount found on the MITR page in Process Direct.

Check the estimated debt amount on the undetermined debt activity on AL. Is the debt activity estimated amount equal to the total negative adjustment amount on MITR for the relevant financial year?

• If they are equal, action a maintenance income test reconciliation debt. See Actioning an undetermined debt on the Debt Management and Information System (DMIS).
  Procedure ends here
• If they are not equal, the estimated debt amount may also include amounts that do not form part of the MIT reconciliation result. This could occur as the system does a backdated assessment as part of the reconciliation process. Go to Step 2
• If the total adjustment amount is zero, the debt will not be because of reconciliation. Investigate to determine the debt reason. This could also occur due to the backdated assessment. Go to Step 3

Investigate the reason for the undetermined debts and if multiple debts should be raised for MIT reconciliation and any other non-MIT reasons.

If there are multiple debts to be raised, raise the MIT reconciliation or re-reconciliation debt as a separate debt and do not amalgamate with other non-MIT reconciliation debts.

Service Officers must separate these debt amounts, as there are specific debt reasons and sections of the Act they must select when creating the MIT reconciliation debt. This information displays in the Account Payable letter issued to the customer, their parent or guardian, or a third party. See Actioning an undetermined debt on the Debt Management and Information System (DMIS).

End of procedure.

Further investigation is required to determine the reason for the undetermined debt and whether a debt or multiple debts should be raised. See Actioning an undetermined debt on the Debt Management and Information System (DMIS).