Child Support estimates review (Pre 1 July 2010) 277-07080000

A parent must notify of any event (go to Step 2 for more details) that may affect the accuracy of their estimate within 14 days. This requirement is outlined in an s160 notice that is sent to them when their estimate is accepted. Parents should also have been verbally advised of this requirement when the estimate election was taken.

Child Support may also become aware of an event or inaccuracy from:

• information from the other customer
• information from a third party
• information provided for a change of assessment or objection decision
• information received, directly or indirectly, from other government agencies, (for example, ATO - employment declaration or a tax return)
• a request from the parent to lodge another estimate
• investigation conducted for an estimate reconciliation

An event is broadly defined and may include any change of circumstance not expected when the estimate was first lodged and may result in an increase in income (such as the commencement of a new job) or a decrease in income (such as the non-payment of an expected contract fee). Events could include:

• the day a customer commences or ceases employment or overtime
• the day a customer begins or ceases to receive Parental Leave Payments
• promotion/demotion
• gain or loss of a contract
• purchase or sale of a rental property (for investment purposes)
• commencing/ceasing a salary package which includes Reportable Fringe Benefits
• non-payment of expected transactions, and
• not commencing a new job/contract as expected

An event can also be defined as the first day on which the rate of a parent's actual income exceeds the rate of the estimated income. This means the first day on which the estimate was "inaccurate". An estimate could be inaccurate from its start date.

If notified or aware of an event or a change that affects the accuracy of a parent's estimate, determine if the estimate must be reviewed or reconciled.

Note: it is not necessary to reconcile all estimates. If the effective start date of an estimate is 1 July 2008 or later and this estimate has never been reviewed (as at the end of both the Estimate Period and Child Support Periods), it must be reconciled. However if the estimate has been reviewed, then it will be determined whether the estimate should be reconciled.

If a customer lodges an estimate that generates a minimum annual rate, this estimate must not be reconciled. However, this estimate may be reviewed at anytime, even after the estimate period and child support periods have ended. Go to References to see the Child Support Guide 2.5.1.50: Estimates of income - before 1 July 2010.

If the estimate needs to be reconciled, see Child support estimates - Reconcile (pre 1 July 2011).

If the other customer in the case contacts to advise they believe the estimate is inaccurate an objection or estimate review may be appropriate. Lodging an objection may be appropriate where it is claimed that the estimate should never have been accepted, or was not accurate on the day it was lodged by the estimating customer. The normal 28 day time limit and EOT provisions apply. See Child Support objections.

If the other customer states that the estimate became invalid after being lodged Child Support will take certain actions depending on whether the customer provides:

• no information or general information, go to Step 4
• specific information, go to Step 5

If the other customer provides no information or information of a general nature advise them that Child Support cannot take any action at this stage. Advise the other customer that once Child Support become aware of an event or more specific information an estimate review will be considered. It may also be appropriate to discuss the option of COA.

Note: if the other customer provides no information or general information quickly check ATO systems and Cuba for any information that is more specific in nature. This may lead to investigation of the estimate.

For example:

'They always lie', 'They work cash in hand - how else can they afford to go to the pub every week'.

'The children say that the other parent told them that they are now doing some casual work', 'A friend told me that they saw Vicky in a XYZ Bank uniform whilst shopping the other night. Vicky's last job was as a customer service consultant'.

If the other customer has specific detail regarding the accuracy of an estimate advise the customer that the Special Estimate Teams (SET) will investigate this.

For example:

'I saw that Rose was driving a ute with an ABC Homes Pty Ltd logo on the side of the Ute. Rose is a builder by trade', 'Rose told me directly that due to a work commitment on Saturday was unable to pick up the kids'.

Note: evidence can be accepted verbally. It would generally only be necessary to request information in writing if it cannot easily be conveyed over the phone.

If no action is required, document the information provided and the decision not to proceed on the Estimate notepad on the Income window, see Documenting Child Support information in Cuba.

If a parent has advised of an event that affects their estimate or Child Support becomes aware of a potentially inaccurate estimate, see Step 2 in Investigate and make decision table.

Check the estimate to determine if it is accurate and assist the parent to correct their estimate if necessary.

Using readily accessible sources, determine if the income earned by the customer is the same as the income estimated to be earned, and if there are any events which are likely to affect the accuracy of the estimate. If unable to identify an event date gather income information for the whole estimate period.

If speaking with a parent about their estimate, go to Step 2.

Investigate the parent's circumstances using the information available, including:

• Cuba's benefits screen
• the external information screen in Cuba
• other information in Cuba such as:
• discussions regarding income
• details of any relevant investigations undertaken
• section 161 and section 120 responses
• change of assessment or objection application, responses or decisions, and
• ATO systems to check for employment declarations, tax returns etc

See the External searches guide (CS) for further information.

This investigation should be relatively quick (approximately 20-30 minutes). If the investigation indicates that the estimate is still accurate and no details require clarification then, generally, no more action is required. Document the information provided and the decision not to continue on the Estimate notepad in the Client Income window.

If the investigation indicates that the estimate may not be accurate, go to Step 2.

If a parent advises of an event or that their estimate may be inaccurate discuss this in more detail. If the possible inaccuracy or event was not advised by the parent who estimated, contact them to discuss this, see Contact with Child Support customers.

Discuss with the customer:

• the estimate, review and reconciliation processes
• the consequences of not keeping Child Support up to date that is, delayed correction of the income and arrears
• the accuracy of their estimate that is, comparing the estimated income with the actual income received since the start date of the estimate

The customer may be unfamiliar with the estimate processes and it is essential that they are actively involved in keeping their estimate accurate.

If it is identified that the estimate is inaccurate, determine:

• the date(s) the estimate became inaccurate
• the actual taxable income and other component amounts received from the date the estimate became inaccurate until present
• the amount of adjusted taxable income likely to be earned for the remainder of the estimate period

If the parent cannot provide the details, ask that it be provided within 7 days (more for international customers).

If unable to contact the parent or the parent has been unable or unwilling to provide the required details, go to Step 3.

If the parent has been contacted and they have provided all required details, go to Step 5.

IA section 161 notice can be issued to investigate the parent's income for the purposes of an estimate review, see Section 120/161 notice Cuba process help, Issue s120/161 notice. A section 161 notice should only be used sparingly as these notices are time intensive for Child Support and the third party who receives the notice. Where possible use the telephone and make informal enquiries.

Before seeking information from a third party check:

• Cuba (including Centrelink data and COA information)
• ATO systems
• any correspondence from other government department (for example Immigration)

and ensure the customer/third party has not previously provided the information.

Issue a section 161 notice where information or previous investigations indicate that the estimate is inaccurate, see Section 120/161 notice Cuba process help, Issue s120/161 notice and:

• the customer cannot be contacted
• the customer is unable or unwilling to provide all relevant income information
• the customer has provided information but there are compelling reasons to doubt its completeness or accuracy

Go to Step 4 for more details on issuing a section 161.

A section 161 notice should request the details of the income received from the start of the estimate period until the present. The information that can be requested may include:

• employment income, including pay slips
• Parental Leave Payment (PLP) income. If PLP is paid to the customer through Centrelink, obtain the income information through the External Information window. See the Centrelink/Child Support information exchange, Centrelink CLU response times for more details about obtaining Centrelink information
• details of contracts, including detailing of remuneration and terms
• financial statements from a property manager for rental properties
• bank statements (to assist in ascertaining cash flow)
• dividend and interest income
• profit and loss statements

For further information see Child Support's information gathering powers.

If there is insufficient information consider if the estimate review should proceed. Consider issuing a section 161 notice on the estimating customer themselves.

A section 161 notice should rarely be issued to an estimating parent for their financial circumstances. If a parent complies with this notice Child Support can only amend the assessment from the date that the parent complied with the notice. If a subsequent estimate has been accepted, Child Support cannot amend the earlier estimate. See 'Issuing a s161 on an estimating parent' on the resources page.

How to proceed with the estimate review depends on the following:

• has there been an increase or a decrease in the parent's income
• was the parent's estimate lodged more than 2 months ago
• did the customer comply with their section 160 notice

See Proceeding with estimate review table.

Note: a parent is taken to have complied with a section 160 notice (the notice that they were sent when the estimate was accepted) if they notify of an event within 14 days of the event (or within 14 days of receiving the notice, whichever is later).

If a parent's estimate has decreased and they advised outside 14 days see Retrospective estimate reviews (income decrease) for further information. For examples of what actions to take when notified that an estimate is inaccurate see review scenarios.

If the parent wishes to make a new estimate election, see Child support estimates (post 1 July 2010).

After assessing the information available determine the:

• date of the event or change, go to Step 7
• income for use in review, go to Step 8

The review date will generally be an identifiable event with the date either supplied by the parent or confirmed through the investigation.

If unable to identify or confirm a specific date, select the most likely event date. Be aware that the estimate could be inaccurate from its start date. For information to assist identifying the date to amend the estimate, go to Step 5.

If there are multiple event dates, that is, a customer's income changed a number of times, the earliest date would be used when reviewing the estimate.

If a section 161 notice is issued to the customer and a response is received within 14 days, the estimate can only be amended on or after the date the notice was complied with. See 'Issuing a s161 on an estimating parent'.

Determine the income to be used to review the estimate. This is the amount of the taxable income plus other components amounts (adjusted taxable income amount) from the event date to the end of the estimate period.

Check the original estimate to determine the end date. It will be either:

• 12 months from the start of the estimate
• 15 months from the start of the child support period

Note: adjusted taxable income will generally be the income a parent receives less allowable deductions. Ensure allowable deductions are discussed with the parent when confirming the income.

The date the estimate was lodged will determine what income should be used in an estimate (including when it is review or reconciled). For income used in an estimate:

• lodged up to and including June 30 2008, see the income hierarchy up to 30 June 2008
• lodged after 1 July 2008, see Income processing for Child Support customers.

When determining other component amounts, do not include reportable superannuation contributions and/or net financial investment loss except net rental property loss if:

• the estimate has an effective start date prior to 1 July 2009
• the first estimate of the child support period was lodged by a WA ex nuptial customer prior to 3 March 2011

If the estimate is to be amended from a date in the past, gather the income information in 2 steps:

1. calculate the actual taxable income and other component amounts earned by the parent from the amendment date until today, and

2. the amount of taxable income and other component amounts the parent is likely to earn for the remainder of the estimate period.

The income to be used will be the sum of Steps 1 and 2.

If the estimate is to be amended from the date notified of an event, calculate the amount of taxable income and other component amounts the parent is likely to earn from that date for the remainder of the estimate period.

When the date the estimate needs to be reviewed from and the income to be used in the review has been identified, contact the parent to confirm this information.

When confirming information with a parent discuss the following

• the date the estimate became inaccurate
• the income information the review will be based upon that is, sources and amounts, including allowable deductions
• the annual income that will be used in the review
• the effect on the assessment

A parent may disagree with the effect of the review or the new annual income amount. However, if they agree with the dates and details of the income used to determine the reviewing income they have confirmed the details.

• If the parent disagrees that the estimate is inaccurate or with the reviewing income, go to Step 2
• If unable to contact the customer, go to Step 4
• If the parent confirms the estimate income, dates etc, go to Finalise estimate review table

If a parent disagrees that the estimate is inaccurate or with the reviewing income, ask them to explain why they disagree. Discuss with them:

• their sources of income during the estimate period that is, employers, lump sum payments, contracts etc
• the periods over which they received this income
• allowable deductions
• any other relevant information

If a parent provides new information go to Step 3, otherwise go to Step 4.

If the parent supplies information that differs from the information gathered, attempt to clarify this with the parent. If unable to resolve this satisfactorily on the phone and the parent has a good estimate history, further supporting evidence is not necessary unless more reliable evidence on hand.

If a parent does not have a good estimate history or there is reason to doubt the accuracy of their information then request written supporting evidence.

When reviewing an estimate from a parent who is not in Australia seek documentary evidence to support the parent's claims. The decision to accept a new or amended estimate of this type without evidence must be made by a Technical Support Officer.

A customer will generally have a good estimate history if they have not significantly underestimated in the past without good reason. A significant underestimation is defined as more than 10% (that is, the actual income was 110% or more of the estimate). What constitutes good reason will be a matter of judgement. A customer who under-estimated because of a clearly identified misunderstanding could be considered to have under-estimated with good reason.

If the parent provides information that:

• contradicts the information gathered but Child Support is satisfied it is correct
• enhances or clarifies the information gathered

reconsider the decision on:

• the date of the review, see Step 7 in Investigate and make decision table.
• the income to be used in the review, see Step 8 in Investigate and make decision table.
• if the review should take place, see Step 5 in Investigate and make decision table. If it is decided that the review is not required document the information supplied by the parent and the decision in a notepad on the existing estimate in the Client Income window, see Documenting Child Support information in Cuba. If the review is still required confirm the date and amount of the estimate review with the parent and go to Finalise estimate review table

If the parent provides information that contradicts the information but does not provide satisfactory evidence to support this information, go to Step 4.

If the parent disagrees with the estimate and does not supply satisfactory evidence or they cannot be contacted decide if the estimate is to proceed. Only continue with an estimate review (in these circumstances) if:

• there is reliable information about the event and income received since the event
• the revised income will exceed the estimate of income by more than 10%

Ensure that all attempts to contact the parent are documented and all discussions with them including their reasons for not agreeing to the review, see Documenting Child Support information in Cuba.

If the decision is not to proceed with the estimate review document the reason for the decision and all customer contact on the notepad on the existing estimate. No further action required at this time. The estimate will need to be reconciled in the future. See Child support estimates - Reconcile (pre 1 July 2011).

To record an estimate review in Cuba, decide which type of estimate review is required.

Cuba allows for 2 different types of estimate review to be loaded in the Client Income window. These 2 types are called:

• CSA Amended EST
• CLI Amended EST

Use a CLI Amended EST if reviewing an estimate because the parent who estimated has advised of an event or change that made the estimate inaccurate. In all other circumstances use the CSP Amended EST.

Load the estimate review into Cuba by:

• opening an existing estimate income with a status of Currently Used from the Client Income window
• once in the Estimate Income window from the Edit menu select the Amend Estimate
• the Type field is then enabled and select a CSA or CLI Amended EST
• update the Notification Date field to indicate the date the estimate review is to take effect from that is, the date of the review, see Step 7 in Investigate and make decision table
• update the Date of Event field
• compile all required fields in the estimate calculator; see Child support estimates (pre 1 July 2010)

All decisions relating to estimate elections, including reviews, must be authorised by a SO3 level or above for staff in SAS SETs. For all other business areas a SO4 or above. If a SO3, in another business area investigates and loads an estimate review, they must pend it and route the created intray to a SO4 or above for approval.

The Service Officer should check before accepting an estimate review that:

• the dates of the estimate review are correctly recorded
• the estimate review is applied to the correct estimate
• all relevant information is recorded, including:
• date of event, date review takes effect
• the information used to determine the reviewing income
• attempts at contacting the customers and discussions with customers, and
• any previous estimate in the period has been reviewed or is in the process of being reviewed

All authorising officers should complete the authorisation checklist and copy it in an estimate review approval notepad.

Note: document the reasons for the decision and reference the legislation used to make the decision.

For more detail about what to document see Documenting Child Support information in CUBA.

When the estimate review is accepted the reviewing income is used in the child support assessment.

Encourage a customer to lodge a new estimate where their circumstances have changed, irrespective of when the customer notifies of an event or we contacted the customer. See Step 5 in Investigate and make decision table.

Estimates can only be lodged every 2 months within the same child support period. If it is less than 2 months since a previous estimate (estimate reviews are disregarded) encourage the customer to call back 2 months from the date they lodged their most recent estimate.

By lodging a new estimate the customer keeps Child Support informed of any changes to the accuracy of their estimate. They may also avoid estimate reconciliation and estimate penalties if their income has increased.

Note: if a parent chooses not to lodge a new estimate and their existing estimate does not adequately reflect their changed circumstances it will be reconciled and estimate penalties applied. An estimate review will be disregarded in any estimate reconciliation.

If the customer wishes to lodge a new estimate see Child support estimates (post 1 July 2010).

Cuba will automatically generate the following letters:

• ME3-1 To a payee advising that an -estimate has been reviewed
• ME3-2 To a payer advising that an estimate has been reviewed

Any variation which results in increased arrears, overpayments and changes to employer withholding deductions will incorporate the appropriate paragraphs alerting customers to the change.