Effect on Family Tax Benefit (FTB) where the customer elects to suspend or end a child support assessment 277-51130050

Parents reconciling is not a terminating child support event. Child Support gives customers the choice of either:

• suspending the child support case for a maximum of 6 months
• ending the child support case

For Family Tax Benefit (FTB), the Maintenance Action Test (MAT) ceases to apply from the date of reconciliation for children of that relationship.

A Manual Follow-up (MFU) activity is automatically created for Families and Child Care (FCC) to contact the customer to confirm their relationship status and the date their relationship status changed if:

• the customer is not linked to the payer on the customer's Centrelink record or if the date from which they were linked is different to the date advised by Child Support (A020MN), or
• the customer separates from the payer before the end of the 6 month suspension period, but they are still linked on the customer's Centrelink record (A022MN)

If the couple separate again within 6 months, the payee will have the previous child support assessment reinstated without having to make a new application. The child support assessment only comes back into force from the date the parents re-separate.

If the customer remains reconciled with the other parent for 6 months, Child Support will end the child support case once they confirm with the customer that they are still partnered. Details of the end case will be sent to Centrelink so that the customer's record is automatically updated. If the couple separate after the case has ended, the customer is required to reapply for child support.

If the customer advises of separation, there are key tasks they should consider in order to protect their personal information. See Separating Safely - protecting personal information.

An FTB customer may choose to end their child support case where the payer is found not to be a parent of the child. This may occur because:

• a court making a section 107 decision. The court is making a decision that Child Support should never have accepted the original application. The court may or may not require the payee to repay the money to the payer, or
• the payee electing to end their child support assessment because there is evidence that the payer is not a parent of the child (such as a DNA test)

If a child support case is retrospectively ended or retrospectively made invalid, consideration needs to be given to whether the:

• original payer continues to be considered a parent of the child/ren
• original payer is no longer considered a parent of the child/ren but is considered a partner or former partner of the payee
• payee has to repay the money to the original payer

If the original payer is no longer considered a parent of the child/ren and:

• is not considered a partner or former partner of the payee, the amounts paid are not considered maintenance income and should be removed from the Maintenance Income Test (MIT), even if the payee is not required to repay any money
• is considered a partner or former partner of the payee and there is:
  • a section 107 court decision that the payee is required to repay the money to the original payer, the amounts paid are not considered maintenance income and should be removed from the MIT
  • no section 107 court decision that the payee is required to repay the money to the original payer, the amounts paid are still considered maintenance income and remain assessable under the MIT

As parents reconciling is not a terminating child support event, a request to end the child support assessment is required from the payee.

Child Support will discuss with the customer their options in relation to any outstanding child support arrears.

Other circumstances where a child support case can be ended include where:

• there is a fear of family and domestic violence on the payee or their family if they continue to receive or pursue child support
• customer advises Child Support of reconciliation

A child support payee in receipt of FTB (or their current partner is in receipt of FTB) can also voluntarily end their case where none of the above reasons apply. Child Support staff will discuss the potential FTB Part A implications and offer to transfer the parent to Families to discuss the potential impacts of this decision on FTB Part A entitlements.

If a payee wants to end their case the customer should be referred to Child Support. For contact details, see Child Support. Alternatively, customers can complete the Ending a child support assessment (CS1671) form, which is available from the Services Australia website.

Note: Child Support will still need to speak to the customer before the case can be ended.

Before 1 July 2018 (15 May 2019 for WA ex-nuptial cases) if the customer or their partner were in receipt of FTB Part A at more than the base rate, secretary approval was required to end the child support case.

Child Support no longer needs Centrelink approval to accept an election to end an assessment from:

• 15 May 2019 for WA ex-nuptial cases, and
• 1 July 2018 for all other cases

If a parent or their current partner is receiving, or is entitled to receive more than the base rate of Family Tax Benefit (FTB) Part A, their rate may be reduced to base rate if they do not have a MAT exemption.

Child Support will discuss the implications of the election to end on their FTB Part A entitlement and will confirm whether the customer or their current partner is claiming FTB or whether they intend to claim FTB at the end of the financial year. Child Support will offer to transfer the parent through to Families staff to discuss the potential impacts before making a decision to end the case. This may mitigate any unexpected and unnecessary financial hardship for the parent. This may include further discussions around whether an exemption may be appropriate.

Note: Secretary approval was still required to end a child support assessment on a WA ex-nuptial case between 1 July 2018 and 14 May 2019. See WA Child Support ex-nuptial cases.

Before 1 July 2018 and 15 May 2019 for WA ex-nuptial cases in some circumstances Child Support would refer the case to Centrelink for approval.

Circumstances included if the child support payee or their current partner was receiving FTB Part A at above the base rate, including customers receiving less than their legislative rate due to a payment choice.

Approval to end cases could only be given where it was considered the customer would continue to satisfy the Maintenance Action Test.

If the current partner of the payee was in receipt of FTB for the child and they were legislatively entitled to receive FTB at more than the base rate, the case could not be ended. The request would not have been approved. The payee was advised of the decision if rejected by Centrelink.

If an 'end case' was approved, customers that were receiving a rate of FTB at or below the base rate due to income, were advised that if there was a change in their income which could entitle them to more than the base rate, they would need to meet the requirements of the MAT in order to be eligible to receive their full legislative entitlement.

In the following circumstances Child Support staff can make the decision to approve or reject a request to end a case (or assessment for a child) on behalf of both Child Support and Centrelink:

• parents reconcile
• full maintenance action test exemption has already been granted
• court decision - payer is not the parent of the child
• the payer is not a parent of the child and the payee applies for child support against the actual parent

Child Support can end an assessment without a request from the payee if:

• a child support terminating event has occurred, for example, the child leaves their care or the child or the payer dies
• an objection against the child support assessment is successful
• the payer is successful in applying to a court for a declaration that the payee is not entitled to an administrative assessment of child support payable by them

When a child/case end is transferred from Child Support for a Child Support Collect customer on the Disbursement method, the system retrospectively changes the case to Private Collect and applies the full maintenance entitlement amount.

This retrospective change in assessment results in the customer having their annualised maintenance income assessed under the Entitlement Method. In the majority of cases, this will result in a decrease in the customer's ongoing rate of FTB Part A. This change in annualised maintenance income can also invoke Mandatory Continuous Adjustment, causing a further reduction to the customer's ongoing rate of FTB.

Note: this is not caused by incorrectly entered/ended case data or a system problem, however it can lead to an unintended and unexpected reduction to the customer's ongoing rate. Occurrences of this issue must be reported to the Level 2 Policy Helpdesk for escalation to the Policy (Advice) Assessment Team for a workaround to be considered. The Resources page has a link.