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Minimum annual rate to nil - Reducing child support assessments 277-03100000



Examples

Examples of calculations of Minimum Annual Rate (MAR) of child support

This table provides examples of calculations of MAR for nominated periods relating to legislative changes since 6 January 2009 except for WA ex-nuptial customers

Nominated period

Example

1. Nominated period commences on or after 6 January 2009 (or 3 March 2011 for WA ex nuptial customers)

A child support period beginning 1 March 2009 uses the minimum annual rate for 2009 of $356. The payer lodges an application on 1 September 2009 seeking to reduce the minimum annual rate to nil, nominating the part of the child support period from 1 March 2009 to 30 June 2009 (122 days). They advise their income is $100 for that period. The customer's annualised income is therefore $299 ($100 / 122 x 365).

The customer has 4 child support cases, 2 of the child support periods start in 2008 and 2 in 2009. As the RMA application was made in relation to a child support period beginning in 2009, the RMA income test amount is 4 times the minimum annual rate for 2009 (4 x $356 = $1,424).

2. Nominated period commences prior to 6 January 2009 (or 3 March 2011 for WA ex-nuptial customers) but after 1 July 2008

On 15 February 2009, a customer lodges an application to reduce their assessment to nil for the period 2 October 2008 to 1 January 2009. They advise they were in prison and not in receipt of any allowances or payment for work for the period 2 October 2008 to 1 January 2009. Since being released from prison on 1 January 2009, they have been in receipt of an income support payment.

The customer’s income for the 12 months from the date of application is $15,000 (based on their Centrelink income support payments). As they have 3 cases, the RMA income test amount is 3 times the minimum annual rate for 2009, that is $356 x 3 cases = $1,068.

The application would be refused because they will be in receipt of an income greater than the RMA income test amount for the 12 months from the date of their application. Further, a customer cannot nominate part of a child support period prior to 6 January 2009.

3. Nominated period commences prior to 1 July 2008 but after 1 July 1999 (prior to 1 July 1999, the minimum rate did not exist)

The child support period commences 1 September 2008. On 15 April 2009, the customer lodges an application for the minimum annual rate not to apply. For the period from 2 October 2008 to 5 April 2009, the payer was in prison and was not in receipt of any allowances or payment for work. Since being released from prison, the payer has been in receipt of Income Support payments.

As the payer's application crosses 6 January 2009, 2 decisions are required:

For the period 2 October 2008 to 5 January 2009, the application would be refused because for the 12 months from the date of application the payer will receive an income (via benefits) that is greater than the RMA income test amount

For the period 6 January 2009 to 5 April 2009, the application would be accepted as the payer's annualised income for this period is less than the RMA income test amount.

4. Nominated period commences prior to 1 July 2008 but after 1 July 1999 (prior to 1 July 1999, the minimum rate did not exist)

A customer lodges an application to reduce their assessment to nil for the child support period 1 October 2006 to 31 December 2007. They advise they were in prison and not in receipt of any allowances or payment for work for the period 1 October 2006 to 5 August 2007. After being released from prison on 6 August 2007, they began receiving an income support payment.

The first 12 months of the child support period is 1 October 2006 to 30 September 2007. The customer's income was nil while they were in prison and they received a total of $1,200 during August and September (based on their Centrelink income support payments). The RMA income test amount is the minimum annual rate for a child support period beginning in October 2006, which is $320.

The application would be refused because they received an income greater than the RMA income test amount in the first 12 months of the child support period.