Income changes for Child Support customers 277-07010070

Based on the income types, Cuba will automatically determine the best income in any child support period where the income record has been varied. Cuba will do this by adding a new income or updating or cancelling an existing income. See Cuba rules for Child Support customers.

If an income has been added manually to the Client Income window, check all the resultant letters and the effect of the change on:

• the case
• the assessment
• any related cases

When a new income has been added to Cuba, a number of changes may occur. If the effect of adding the new income:

• results in arrears see Debt repayment (CS)
• creates an overpayment, see Child support overpayments and other payee debt (CS)
• results in the assessment being based on the fixed annual rate as the customer is on a low adjusted taxable income and they did not receive an income support payment during the Last Relevant Year of Income (LRYI), see Child Support Guide 2.4.11: Fixed annual rate of child support for certain low income parents. If the customer is genuinely on a low income, they may be able to apply for the fixed rate not to be used, see Fixed annual rate not to apply applications (CS), or
• results in the assessment being based on the Minimum annual rate, see Child Support Guide 2.4.12: The minimum annual rate of child support

If the customer is incarcerated or in receipt of a Disability Support pension, see

Minimum annual rate to nil - Reducing child support assessments.

For more information on how Cuba applies income, see Cuba rules for Child Support customers.

When an income is updated, the system automatically generates letters advising of an income change:

• MIR1-1: to a payee advising that a new income is being used
• MIR1-2: to a payer advising that a new income is being used
• MAC1-3 (No change to Annual Rate): to both customers if a new income has been added and used, but there has not been a change to the annual rate
• RPO-01 (Receiving Parent Overpayment): to a payee if the variation results in either the creation of an overpayment, or an increase in a payee’s existing case overpayment balance. The RPO-01 will not generate if the case payment is removed on the same day it was created. See Child support overpayments and other payee debt
• NOA-01 - Letter to both parties. Sometimes the system:
• suppresses the Cuba letters, and
• issues a NOA-01 CS Notice of Assessment and covering page combining the decision letters. Consider when NOA-01 letters issue

Letters will incorporate appropriate paragraphs alerting customers to any variation which results in:

• increased arrears
• overpayments, or
• changes to employer withholding deductions

Check all Cuba generated letters to ensure they are correct.

MIR1-1 and MIR1-2 letters

Some of these letters are generating with an incorrect effective start and end date, ‘1 January 2000 to 31 December 4000’. This results in new assessment notices issuing for multiple periods not impacted by the new income.

The new income is correctly reflected and applied to the relevant periods in Cuba using correct start and end dates.

If this issue is identified prior to letters issuing:

• delete the incorrect letter/s
• create a manual letter (MX0-2 Unique Letter with Assessment) to advise the new income being used and the appropriate changes to the assessment period/s

It may be appropriate to contact customers by phone to discuss the impact of an income change. See Contact with Child Support customers.

These impacts can include:

• overpayments (including overpayment waiver and refunding)
• negotiation of payment of overdue child support
• making an estimate election
• opt out arrears period
• applications for a Change of Assessment in special circumstances
• application for the Fixed annual rate not to apply
• application to reduce a minimum assessment to nil (RMA)

Document all discussions and any follow up actions for finalisation in the Client Income window.

Note: when documenting reasons for a decision, the legislative reference used to make the decision must be included.