Checklist
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Authorisation checklist
Issuing of s161 notices on estimating parent
For reviewing purposes, only issue s161 notices to third parties to gather and confirm income information. Rarely will a s161 notice be issued to the estimating parent. If a s161 notice is issued to the estimating parent and they comply (respond within 14 days) with the notice, then their estimate can only be amended from the date they respond. This is even if Child Support is aware of an earlier event that affects the accuracy of the estimate.
Do not issue a s161 on the estimating parent if the estimate is able to be reconciled at the end of the period. Do not continue with an estimate review and instead allow the estimate to be reviewed or reconciled later when more reliable information is available.
Retrospective estimate reviews (income decrease)
There is no legal impediment to reviewing an estimate in the event of an income decrease. However, to remain consistent with the overall intentions of the child support scheme it is Child Support policy that very few assessments will be retrospectively amended where there has been a decrease in income.
Retrospectively reviews can only be done where a customer does not advise of a reduction in income within 14 days of the event.
Consider the following to determine whether a review is appropriate:
- the information available from the customer who lodged the estimate or from other persons
- the effect upon both parents of any change
- the extent to which a review and amendment of the assessment would affect the accuracy of the estimate
Information available
Consider why the parent did not advise within 14 days of the event. The reason for non-compliance must be compelling before a review would be considered.
Example: if a parent was physically incapacitated around the time of the event, then this could be a compelling reason for why they did not contact within 14 days of the event.
Consider the degree to which the decrease in income was foreseeable by the parent when they lodged their estimate. Only if the decrease was not foreseeable should a review be considered.
If there is no compelling reason as to why the customer did not contact within 14 days of the event then do not review the estimate.
If there is a compelling reason then also consider the remaining 2 factors before continuing with a review.
Effect upon both customers of any change
Where a retrospective review/amendment is proposed, extreme care must be taken to identify the effect on both customers. If an overpayment would be created, then do not continue with an estimate review.
Accuracy of the assessment
A parent is required to keep their estimate accurate. However not every change or event will cause the assessment to change greatly. For the purpose of a retrospective decrease an estimate should not be reviewed if the change in the liability is less than 10% of the existing child support liability or if the liability adjustment for the 'retrospective period' is less than $50.
Proceeding with an estimate review
Table 1: this table describes what action is required to proceed with the estimate review.
Change | Estimate Status |
Increase | No prior estimate lodged for the child support period Compliance - Not applicable Suggested Response No action required (Increase will be reflected in new child support period) |
Increase | Existing estimate accepted more than 2 months ago Compliant - Suggested Response - Encourage a new estimate from date of notification
- If the parent does not want to lodge a new estimate advise them of the effect this will have when their estimate is reconciled and review the estimate from date of notification
Non-Compliant - Suggested Response - Encourage new estimate from date of notification
- Review existing estimate from date of event
|
Increase | Existing estimate accepted less than 2 months ago Compliant - Suggested Response - Review existing estimate from date of notification
- Encourage the parent to lodge a new estimate when the 2 months have passed
Non-Compliant - Suggested Response - Review existing estimate from date of event
- Encourage the parent to lodge a new estimate when the 2 months have passed
|
Decrease | No prior estimate lodged for the child support period Compliance - Not applicable Suggest option of new estimate, see Child support estimates (post 1 July 2010). |
Decrease | Existing estimate accepted more than 2 months ago Compliant - Suggested Response Discuss option of a new estimate from date of notification. Non-Compliant - Suggested Response |
Decrease | Existing estimate accepted less than 2 months ago Compliant - Suggested Response - Review existing estimate from date of notification
- Encourage a new estimate when 2 months is up
Non-Compliant - Suggested Response |
Income estimate scenarios
Table 2: this table provides scenarios and responses relating to income estimates.
Item | Scenario |
1 | Scenario 1 - Child Support Period: 01/07/2003 - 30/09/2004
- Estimate Period: 01/08/2003 - 30/09/2004
- Estimate loaded for $27,000 pa
- Pyr rings on the 11/11/2003 and advises that their income has dropped to $10,000 pa
What options are offered to customer? Response: New estimate can be taken from date of notification that is, 11/11/03 if the customer's income has dropped a significant period of time ago a referral to COA may be appropriate. |
2 | Scenario 2 - Child Support Period: 01/07/2003 - 30/09/2004
- Estimate Period: 01/08/2003 - 30/09/2004
- Estimate loaded for $27,000 pa
- Pyr rings on the 11/11/2003 and advises that they have had a promotion to $35,000 and they had been meaning to call since it occurred on the 05/10/2003
What options are offered to customer? Response: A new estimate is required from today as customer's income has increased and it is more than 2 months since the original estimate. As the customer did not advise within 14 days a 'CLI amended' estimate needs to be loaded from the event date of the 05/10/2003 |
3 | Scenario 3 - Child Support Period: 01/07/2003 - 30/09/2004
- Estimate Period: 01/08/2003 - 30/09/2004
- Estimate loaded for $27,000 pa
- Pyr rings on the 11/09/2003 and advises that they have accepted a promotion to $35,000 pa today
What options are offered to this customer? Response: As the change in income is within 2 months of the original estimate a new estimate cannot be taken. A 'CLI amended' estimate should be taken to reflect the higher earnings of the customer. The customer should be encouraged to call back at the end of the 2 month period since the original estimate to lodge a new estimate. |
4 | Scenario 4 - Child Support Period: 01/07/2003 - 30/09/2004
- Estimate Period: 01/08/2003 - 30/09/2004
- Estimate loaded for $27,000 pa
- Pyr rings on the 11/11/2003 and advises that they have had a promotion to $35,000 and they had been meaning to call since this occurred on the 05/11/2003
What options are offered to customer? Response: A new estimate is required from today as the customer's income has increased and it is more than 2 months since original estimate lodged. As the customer advised us within 14 days, a 'CLI amended' estimate is not needed. |
FAQ relating to income estimates
Table 3: this table provides some frequently asked questions and answers relating to income estimates.
Item | Description |
1 | Question: Can Child Support amend any part of the child support formula when reviewing an estimate? Answer: No. When reviewing an estimate only consider whether to amend the child support income of the customer and not any other part of the child support formula (for example, annual rate, care percentage). |
2 | Question: For an estimate lodged after 1 July 2008, when determining what Child Support Income to use when amending an assessment because of an Estimate Review, is there any discretion as to how I calculate this amount? Answer: No. The Child Support Income must reflect the customer's adjusted taxable income (less the customer's self-support amount, any relevant dependent child amounts and/or any multi-case allowances) that will be earned from the event date (or notification date) until the end of the original estimate period. This is irrespective of whether an estimate review was lodged later in the original estimate period. |
3 | Question: I have discovered that more than one event has occurred since the estimate was first accepted. How should I review the estimate? Answer: Only review any estimate once at any given time. The amendment date will be the earliest event date that resulted in an increase in income. When calculating the adjusted taxable income ascertain the income received since the event date (or notification date) until the end of the original estimate period taking into account all further fluctuations in income. This may include income received in a period that is now covered by a subsequent estimate. |
4 | Question: How do I review an estimate where a lump sum has been received? Answer: Lump sums need to be treated no differently than 'regular' assessable income receipts. The receipt of a lump sum would ordinarily constitute an event for reviewing purposes. When calculating the [adjusted taxable income ascertain the income received since the event date (or notification date) until the end of the original estimate period taking into account the assessable lump sum payment if it falls within this period. |
5 | Question: How do I review multiple estimates? Answer: Each estimate must be looked at separately when considering a review. In other words, there must be an event defined for any estimate that is to result in an amendment. |
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