Manual reconciliation procedure for child support estimates (from 1 July 2011) 277-07060020

Item

Scenario

1

IAO covers whole Estimate Period

Example:

Estimate of $0 lodged 01/07/2018. A COA decision then sets income of estimating parent at $52,000 for the whole 2018/19 financial year.

Action:

There is no estimate period to review as the IAO is in force for the entire estimate period Set the Estimate's Reconciliation Status to Recon-No Change.

2

IAO covers part of Estimate Period and the IAO decision prevents any amendment to the other part of the estimate period

(E.g., the COA/AGR/CO containing the IAO has acknowledged the Estimate and has clearly stated that no more changes should be made to the Estimate period.

Example:

Estimate of $0 lodged 01/07/2018. A COA decision then sets the income of estimating parent at $52,000 for the period from 01/10/2018 - 30/06/2019. In the Notice of Decision, the Decision Maker states that there is an estimate of $0 in place from 01/07/2018 but finds that it would be unfair to change the assessment for that period from 01/07/2018 - 30/09/2018.

Action:

Cannot Amend the Estimate. Set the Estimate's Reconciliation Status to Recon-No Change.

3

IAO covers part of Estimate Period and the IAO decision does not prevent amendment to the other part of the estimate period. An event affecting the accuracy of the Estimate occurs AFTER IAO.

Example:

Estimate of $0 was lodged 01/07/2018. A COA decision then sets the estimating parent's income at $52,000 for the period from 01/07/2018 - 30/03/2019. Therefore, from 01/04/2019 - 30/06/2019, the Estimate of $0 is back in force. The actual income for 2018/19 is higher than the expected ATI. When reviewing the estimate period 01/04/2019 - 30/06/2019, the Service Officer confirms that an event affecting the accuracy of the Estimate has occurred on 01/05/2019. The estimating parent commenced earning $2,000 per week.

Action:

The Service Office must complete the review and determine if an amendment is required. If appropriate, the Estimate can then be amended from the Date of Event (DOE) until the 30/06/2019. In the above example, an amendment of $2,000 per week would be keyed for the period from 01/05/2019 - 30/06/2019.

Note: when keying, both the DOF and the Date of Notification (DON) must match the date that the amendment is to take effect. In the example above, 01/05/2019 should be recorded in both of these date fields

4

IAO covers part of Estimate Period and the IAO decision does not prevent amendment to the other part of the estimate period. An event affecting the accuracy of the Estimate occurs BEFORE IAO.

Example:

An estimate of $0 was lodged 01/07/2018. A COA decision then sets the Estimating parent's income at $52,000 from 01/01/2019 - 30/06/2019. Therefore, from 01/07/2018 - 31/12/2018, the Estimate of $0 remains in place. The COA decision does not prevent an amendment to the period 01/07/2018 - 31/12/2018. The actual income for 2018/19 is higher than the expected ATI. When reviewing the estimate period 01/07/2018 - 31/12/2018, the Service Officer confirms that the parent worked from 01/10/2018 - 31/12/2018 and earned a total of $30,000.

Action:

Service Officers must only consider events affecting the accuracy of the estimate in the period under review. The Date of Event (DOE) will be the date that the estimate was inaccurate and affected the assessment. If there was more than one event, these other events must all be included within the one amendment.

If amending the estimate, the amount of income earned should be keyed as a periodic amount and the end date should always be 30 June in the relevant year. Note: Do not short date the overall amendment period to end before the IAO starts. If the income earned was not periodic, it would first need to be converted to a periodic amount. The annualised income in the assessment must be reflective of the income the customer earned in the period under review..

In the example above, the Service Officer calculates that the amount (01/10/2018 - 31/12/2018 $30,000) would otherwise annualise to $120,000. The Service Officer would key this as a periodic amount of $10,000 per month from the DOE 01/10/2018 until the 30/06/2019. The Date of Notification (DON) must be keyed to match the DOE that is 01/10/2018 in this example. The periodic amount could also be weekly or fortnightly if required to provide the most accurate income.

The DON must be keyed to match the DOE. The DOE must be the first date that the estimate became inaccurate in the assessment. In the example above, the DOE and the DON must both be keyed as 01/10/2018.

Note: to prevent an inaccurate annualised income Service Officers must not short date the Amendment period to the day before the IAO start date and should not key a one off amount.

5

IAO covers part of Estimate Period and the IAO decision does not prevent amendment to the other part of the estimate period. An event affecting the accuracy of the Estimate occurs DURING the IAO. Estimate then continues AFTER the IAO ends.

Example:

An estimate of $0 is lodged from 01/07/2018. A COA decision then sets estimating parent’s income at $52,000 from 01/07/2018 - 31/12/2018. The Estimate of $0 comes back into force from 01/01/2019 - 30/06/2019. The actual income for 2018/19 is higher than the expected ATI. When reviewing the estimate period 01/01/2019 - 30/06/2019, the Service Officer confirms the parent started a new job on 01/12/2018 earning $2,000 per week (approx. $104,000 per annum) which continued until 30/06/2019. This event occurred during the IAO period and affected the accuracy of the estimate that continued after the IAO ended.

Action:

Use 01/01/2019 as the Date of Event (DOE) for the Amended estimate. Although the estimating parent’s income originally changed on 01/12/2018 during the IAO period, the first date that the estimated income became inaccurate in the assessment was 01/01/2019. In this example, an amended estimate of $2,000 per week would be recorded with a DOE 01/01/2019 until 30/06/2019 and replaces the inaccurate estimate of $0 in the assessment.

Note: when keying, both the DOE and the Date of Notification (DON) must match the date that the amendment is to take effect. In the example above, 01/01/2019 must be recorded in both of these date fields.

Example

Description

Two children of the assessment, one child in each parent’s care

Parent A has an assessed liability of $2000 for child one.

Parent B has an assessed liability of $1416 (FAR) for child 2, based on an estimate of $18000.

Parent A was the overall payer with an assessed amount of $584 ($2000 - $1416).

Parent B lodged a tax return and their estimated income of $18,000 was auto-reconciled using their higher actual income of $23,000. Using the higher income of $23,000 resulted in Parent B’s FAR of $1416 reducing to $0.

Parent A’s liability as the overall payer increased from $584 to $2000. This was because Parent A’s rate of $2000 was no longer being reduced by Parent B’s FAR of $1416.

In this example, Parent B has benefitted from their own underestimation. The estimate should not have been reconciled.