Complex system processing for reverse child support cases 277-03020020

When a role reversal occurs there are a number of factors that can impact the assessment accuracy. Most reverse case processing discrepancies can be resolved by Service Officers following the process in Managing reverse child support cases.

For more complex reverse case system issues, Service Officers must refer to their SSO to investigate. Complex reverse case system issues include:

• Income discrepancies
• Mixed Assessments
• Non-parent carer cases
• Other events such as:
• child returns to parent’s care and formula departure applies
• terminating event due to reconciliation
• terminating event due to not being advised of a change in care within 26 weeks
• apply post separation income to reverse case
• both cases ended after payee election to end
• international customers

As of 23 May 2018, a parent’s amended taxable income will be used in most circumstances, see Australian Taxation Office (ATO) income for Child Support customers.

The SSO:

• Applies an interim formula modification to set the annual rate based on the correct Adjusted Taxable Income (ATI) (original taxable income or amended taxable income) used in the originating case, see Agreements Cuba Process Help, Add, update or delete a formula modification
• Completes a Cuba Incident Form (CIF) and forwards this for EL2 approval
• Once the CIF is processed, deletes the formula modification
• Records their actions in the Case window of all cases

When a parent lodges an estimate of income it should be applied to all active cases the customer is party to (regardless of role). However, this does not occur in all instances. If a reverse case generates automatically the estimate of income is not automatically applied to this reverse case.

Manual processing is required to apply the estimate to the reverse case.

• If a customer with a reverse case is making a new estimate election in real-time, see Table 6 in Child support estimates and/or
• The Service Officer to ensure child support estimate is the best option, during the New Customers Registration process

Otherwise, the SSO:

• Manually applies the estimate/s to all cases, see Estimates Cuba Process Help

When a customer lodged an estimate of income between 1 July 2008 and 1 July 2010 Cuba did not automatically apply the estimate to all cases and it was possible to select the estimate to apply to only 1 case. During that period, Cuba prompted the Service Officer to select all cases with the same child support period start date, however this was not a mandatory action and some cases did not have the estimate applied appropriately.

After the processes in Correcting errors on Child Support cases have been completed (as real time processing will never apply to these cases), manual processing is required to correct the error.

The SSO:

• Manually applies the estimate/s retrospectively to all cases, see Estimates Cuba Process Help, Record an estimate of income (post 1 July 2010 provisions)

A new child support period does not commence just because a parent’s role changes and a reverse case is generated. The child support period start date used in the reverse case is the same as the date used in the existing case, however Cuba does not always apply the original child support period and instead commences a new 1 using the date the roles reversed.

In this instance, a customer may have estimated their income for a child support period that was incorrect. When the child support period is aligned the estimate is revoked. This issue only involves estimates that apply from 1 July 2008 to 30 June 2010.

As aligning the child support periods revokes the estimate the customer must apply through the courts to have this changed.

The customer cannot apply through the Change of Assessment process as this period is greater than 18 months. The References page contains a link to the Child Support Guide 4.3.2: Applications and orders about decisions under the Assessment Act.

Note: do not apply system processing to correct this assessment.

Duplicate letters may issue to customers who have a reverse case where the customer is recorded as the payee in 1 case and the payer in the other, for example when the customer lodges an estimate of income a letter will issue for each case, even though they are assessed to either pay child support as the ‘overall payer’ or receive child support as the ‘overall payee’.

In some instances, such as when a customer’s Post Separation Income (PSI) is accepted, a letter issues from both cases but without a case number specified.

After processing changes to reverse cases check that all letters issuing are appropriate.

A mixed assessment occurs when child support for some of the children of a case is assessed using the formula and other children are covered by an agreement, court varied assessment (CVA) or change of assessment (COA) decision. This may occur when an agreement, CVA or COA has only ever applied to some of the children or if it stops applying to some of the children because of a change in circumstances.

Manual processing is required to ensure the:

• child support periods are aligned
• the assessments are being accurately reflected and
• liability is being correctly raised on only 1 case (even though the caring arrangements may be reflected via multiple cases)

Agreement suspensions and terminations due to care

If the assessment is based on an agreement and a care change results in the payee ceasing to be an eligible carer for the child (less than 35% care) for more than 28 days, the agreement will end for that child from the date the payee ceased to be an eligible carer. An agreement suspension period may apply for 28 days (or up to 26 weeks in some circumstances). See Suspending or ending a Child Support agreement due to care.

If the agreement continues to apply for another child/ren, manual processing may be required to determine the net annual rate payable via a mixed assessment:

• in the Case Liability Rates window:
• open the liability for the current period
• check the ‘payee’s annual rate’ to determine the amount of child support payable by the payee now they have ceased to be an eligible carer
• in the Clauses window:
• reduce the annual rate using a formula modification (other clause)

Note: the 1 July 2018 changes for the suspension and ending of agreements due to care only apply to child support cases involving WA ex-nuptial children from 15 May 2019.

Agreement role swap clauses

If the agreement has a clause that allows the roles of the parties to swap when there is a care change and the clause has been activated, the agreement will not be suspended or terminated if the payee ceases to be an eligible carer. Child support as provided by the agreement will become payable to the other party when the specified level of care applies. See Managing Changes affecting a child support agreement.

If there are other children on the agreement not affected by the role swap clause and the overall roles of payer and payee do not change, manual processing will be required to determine the net annual rate payable by offsetting the 2 agreement rates:

• in the Clauses window:
• reduce the annual rate using a formula modification (other clause)

If the overall roles of payer and payee do change, a reverse case will need to be created and an agreement registration will need to be entered on the new case. The original case will also need to be modified:

• in the Clauses window:
• enter a clause to reduce the amount by 100%

If there are other children on the agreement not affected by the role swap clause, manual processing will also be required on the reverse case to determine the net annual rate payable by offsetting the 2 agreement rates:

• in the Clauses window:
• reduce the annual rate using a formula modification (other clause)

Once the appropriate modifications have been keyed, accept the agreement. Delete agreement acceptance letters (REG5-1/2 letters), however the PNA that is created should still be sent to both parents.

Manual processing is required when the children of the case are in shared or divided care and 1 party is assessed to pay in accordance with the child support formula; whereas the other party is assessed to pay in accordance with a departure. This is because Cuba does not automatically offset the 2 amounts and instead creates an annual rate in each of the cases.

Example: Mike and Fiona have 2 children, John and Travis. Initially both children are in Fiona’s 100% care. Mike is assessed to pay Fiona periodic amounts of $6,000 per child per annum ($12,000 total) in accordance with a change of assessment (COA) decision.

A care change occurs resulting in John moving into Mike’s 100% care (Travis remains in Fiona’s 100% care). Mike is assessed to pay Fiona an amount of $6,000 for Travis (as per the COA decision) and Fiona is assessed to pay Mike a formula amount of $4,904 for Travis.

The net outcome is Mike pays Fiona the difference of $1,096 ($6,000 COA less $4,904 formula = $1,096).

Manual processing is required to determine the net annual rate by offsetting the 2 amounts.

The SSO:

• Using the PSM enquiry macro, create and send a referral request to the Program Support Manager

The PSM:

• In the Formula Modification window:
• enters a clause to reduce the amount by 100%, or
• reduces the annual rate using a formula modification (other clause)
• records their actions in the Case window for each case

In 1 child support case there may be separate assessments for children, for example the assessment for 1 child may be based on an agreement and the other on the administrative formula. A parent may make an estimate election in the assessment where there is no Income Amount Order (IAO) in place. As Cuba does not recognise that in 1 child support case the assessments for each child are determined independently the estimate cannot be accepted as an IAO is in place, even if it does not apply to all children.

The customer must apply for a change of assessment to have their income taken into account in this circumstance.

Calculate the mixed assessment by completing a manual calculation, using the Child support formula calculator.

If a manual mixed assessment needs to be applied for the first time or an existing mixed assessment needs to be recalculated to a new amount, record the manual calculations in the Formula Modification Window including the following standardised documentation:

'This mixed assessment calculation is based on the current formula and departure amounts. If a new event occurs that would ordinarily vary the formula or departure amounts, for example a new income is received; or a care change occurs, this mixed assessment will need to be recalculated and reapplied via the formula modification window - please contact an SSO'.

Add a Special Contact to the Customer windows of both customers. Add a notepad with the subject heading ‘Mixed Asst. Formula Modification’ with the following standardised documentation:

‘This mixed assessment calculation is based on the current formula and departure amounts. If a new event occurs that would ordinarily vary the formula or departure amounts, for example a new income is received; or a care change occurs, this mixed assessment will need to be recalculated and reapplied via the formula modification window - please contact an SSO’.

If a retrospective mixed assessment period is to be amended, see Correcting errors on Child Support cases.

Duplicate letters may issue to customers who have a reverse case where the customer is recorded as the payee in 1 case and the payer in the other, for example when the customer lodges an estimate of income a letter will issue for each case, even though they are assessed to either pay child support as the ‘overall payer’ or receive child support as the ‘overall payee’.

In some instances, such as when a customer’s Post Separation Income (PSI) is accepted, a letter issues from both cases but without a case number specified.

After processing changes to reverse cases check that all letters issuing are appropriate.

When a parent lodges an estimate of income this is used as their income in any calculation that determines the cost of the child. Where the applicant is a non-parent carer the costs of the child are determined using both parents’ incomes. This means the estimate should be used in the cost of child calculations on all cases where there is a non-parent carer.

As Cuba does not automatically apply a parent’s estimate to all cases manual processing is required.

Example: Jackie and George have 3 children. Zara lives with Jackie, Peter lives with George and Kara lives with Polly. Cuba represents this scenario in at least 3 cases. If George lodges an estimate it must be applied to all cases. Cuba automatically applies the estimate to some cases, however manual processing is required to ensure the estimate is accurately reflected in all cases.

The SSO:

• Checks the child support period start dates on the reverse and originating cases are the same
• If necessary, aligns the child support period, see Child Support Period Management Cuba Process Help
• Ensures the estimate is keyed on all related cases
• Runs eligibility and checks the estimate has been correctly applied to all cases, see Eligibility Cuba Process Help
• Records their actions on the Case window in a notepad, see Documentation Cuba Process Help
• Finalises the SSO enquiry, see Technical support in Child Support, and
• Refers the case back to the owning Service Officer for customer contact, see Contact with Child Support customers

Where an income is updated for a parent who is liable to pay a non-parent carer, Cuba does not always apply that new income to the case where the parent has the role of ‘other liable parent’. This means that the parent is assessed on different incomes within the same legislative case.

Complete the processes in Correcting errors on Child Support cases. Once completed, if a decision is made to correct the error, manual processing is required.

The SSO:

• Completes a manual calculation for the assessment and adds a formula modification for this amount. See Agreements Cuba Process Help, Add, update or delete a formula modification
• Records the manual calculations in the Case window for each case
• Uses the PSM enquiry macro, to create and send a referral request to the Program Support Manager

The PSM:

• Checks the accuracy of the calculations in all cases
• Corrects the calculations if required and records these in the Case window
• Records their approval in the Case window for each case
• Refers the case back to the SSO for processing. If customer contact is required, this is completed by the owning Service Officer. See Contact with Child Support customers

Where a non-parent carer cares for children from more than 1 assessment case Cuba does not reflect the 2 different incomes that should be used in the assessment. In the below example, the father’s income would be the same for both children but as each child has a different mother their assessments need to be based on their own mother’s income. As Cuba shows both children on 1 case instead of 2, manual processing is required.

Example

Jane has 100% care of 2 children (Billie and Marley). Billie is the child of Craig and Lisa. Marley is the child of Craig and Sammy. Jane applies for Craig and Lisa to be assessed for child support for Billie and Craig and Sammy to be assessed for child support for Marley. Manual processing is required because Cuba reflects the liability of Craig in a single case when Craig should be assessed in 2 separate cases.

The SSO:

• Identifies the correct child support period, basic values and incomes to be used in all assessments
• Completes a manual calculation for each child using the formula most relevant to the particulars of each case. Section 2.4.1 of the Guide provides the following formulas:
• Formula 1 - the basic formula, for a single child support case (section 35). See Chapter 2.4.7
• Formula 2 - for a single child support case with a non-parent carer (section 36). See Chapter 2.4.8
• Formula 3 - if 1 or both of the parents have multiple child support cases (section 37). See Chapter 2.4.9
• Formula 4 - if a parent has multiple child support cases and there is a non-parent carer for 1 or more children (section 38). See Chapter 2.4.9
• Formula 5 - for a child support case with a non-parent carer where 1 parent is not assessed because they are not a resident of Australia or there are special circumstances (section 39). See Chapter 2.4.10
• Formula 6 - for a child support case with a non-parent carer where 1 parent is deceased (section 40). See Chapter 2.4.10
• Records the manual calculations in the Case window for each case
• Uses the PSM enquiry macro, to create and send a referral request to the Program Support Manager

The PSM:

• Checks the accuracy of the calculations in all cases
• Corrects the calculations if required and records these in the Case window
• Records their approval in the Case window for each case
• Refers the case back to the SSO for processing. If customer contact is required this is completed by the owning Service Officer, see Contact with Child Support customers

Manual processing is required for cases where the multi case cap or multi case allowance has been incorrectly applied.

The SSO:

• Checks the care details of all children are accurately reflected in all cases
• Completes a manual calculation for each case using the Child support formula calculator
• Records the manual calculations in the Case window for each case
• Uses the PSM enquiry macro, to create and send a referral request to the Program Support Manager

The PSM:

• Checks the accuracy of the calculations in all cases
• Corrects the calculations if required and records these in the Case window
• Records their approval in the Case window for each case
• Refers the case back to the SSO for processing. If customer contact is required this is completed by the owning Service Officer, see Contact with Child Support customers

Cuba may reflect some eligible children in non-parent carer cases as relevant dependent children.

Manual processing is required to accurately reflect the eligible children.

Example: Ross and Taylor have a case for 2 children. Ross also has a case with Brooke for Corey who is in shared care. Cuba incorrectly applies both a multi-case allowance and dependent allowance for Corey. Ross should only receive the multi-case allowance.

The SSO:

• Completes a manual calculation for the assessment using the Child support formula calculator, and add a formula modification for this amount. See Agreements Cuba Process Help, Add, update or delete a formula modification
• Records the manual calculations in the Case window for each case
• Uses the PSM enquiry macro, to create and send a referral request to the Program Support Manager

The PSM:

• Checks the accuracy of the calculations in all cases
• Corrects the calculations if required and records these in the Case window
• Records their approval in the Case window for each case
• Refers the case back to the SSO for processing

Note: if customer contact is required it is completed by the owning Service Officer, see Contact with Child Support customers

Manual processing is required if Cuba incorrectly applies a component of the formula, for example cost of children or relevant dependent allowance.

The SSO:

• Completes a manual calculation for the assessment using the Child support formula calculator and add a formula modification for this amount. See Agreements Cuba Process Help - Add, update or delete a formula modification
• Records the manual calculations in the Case window for each case
• Uses the PSM enquiry macro, to create and send a referral request to the Program Support Manager

The PSM:

• Checks the accuracy of the calculations in all cases
• Corrects the calculations if required and records these in the Case window
• Records their approval in the Case window for each case
• Refers the case back to the SSO for processing. If customer contact is required, this is completed by the owning Service Officer. See Contact with Child Support customers

Duplicate letters may issue to customers who have a reverse case where the customer is recorded as the payee in 1 case and the payer in the other, for example when the customer lodges an estimate of income a letter will issue for each case, even though they are assessed to either pay child support as the ‘overall payer’ or receive child support as the ‘overall payee’.

In some instances, such as when a customer’s Post Separation Income (PSI) is accepted, a letter issues from both cases but without a case number specified.

After processing changes to reverse cases check that all letters issuing are appropriate.

When a child returns to a parent’s care during a period where a CVA or change of assessment applies Cuba does not automatically apply the departure amount and manual processing is required.

The SSO refers the case to a PSM. The PSM:

• determines whether the formula departure should be applied
• records their actions in the Case window
• refers the case back to the SSO to add the children. See Assessments Cuba Process Help, Add a child to a case

Note: if customer contact is required this is completed by the owning Service Officer, see Contact with Child Support customers

Post 1 July 2008, when customers are reconciled for more than 6 months the child support case/s end as this is defined as a terminating event. See Terminating events (Stage 2) (CS).

Manual processing is required if there is an agreement, CVA or change of assessment in place.

The SSO:

• Ends both cases, see Assessments Cuba Process Help, End an assessment
• Records their actions in the Case window of both cases

Where a customer has indicated they would like to reapply for Child Support after a care terminating event (care advised 26 weeks or more after event and all carers cease to be eligible), the case should be restarted from the date the request was made.

Online applications, macros and guided processes in Pluto ask customers if they want to apply for a new assessment if their care change causes their assessment to end. The customer’s response to this question will be stored in a notepad. If a customer has asked to reapply for an assessment, the assessment will restart for the date this question was answered.

As the child support assessment will be active until eligibility is run following the acceptance of the care change, the child support assessment can be restarted by the owning officer without the need for a referral to New Customers. Follow the process for creating a reverse case with the following exceptions:

• assessment will begin on the day the application was made
• customers must be contacted to identify what collection method they require
• child support periods will not be aligned
• formula departures; most formula departures, that is, change of assessment (COA), agreements (AGR) and court orders (CO) will not survive a terminating event. The only exceptions are a non-periodic payments clause in an agreement that does not affect the annual rate and lump sum crediting provisions in a binding agreement. However these will not apply again until the payee named in the agreement again becomes an eligible carer
• estimates; if there was an estimate of income in place for either parent prior to the terminating event, contact the estimating parent to discuss their income:
• if the estimate was in place prior to the terminating event and the case is restarted within the same financial year and the parent does not revoke the estimate, the estimate should be used as that parent’s income in the restarted assessment
• if the estimate election was made during a period when the case had ended, that is after change in care occurred, ask the customer if they wish to lodge a new estimate election

A customer can apply to have additional income earned after separation excluded from their adjusted taxable income, referred to as post separation income (PSI). See Post separation income for Child Support customers.

Manual processing is required to reflect the PSI in both cases.

The SSO:

• Adds the PSI to both cases, see Post Separation income (PSI) Cuba Process Help, Add a Post Separation Income
• Documents their actions in the Case window of both cases

Where both parents are eligible carers a reverse case will exist. One case may have an annual rate and the other case must have a $0 annual rate. In these circumstances the payee for the overall case is easily identified as they are the parent entitled to receive child support.

However, in cases where both annual rates are $0 for example neither parent is assessed to pay child support because both parents are on a low income it is unclear which parent is the payee when determining who is eligible to elect to end the assessment.

For details on how elections to end can be made in cases where the liability is $0 see Ending a Child Support Assessment.

If a parent elects to end an assessment, this can have Centrelink implications if the other parent (the payer for child support purposes) is in receipt of Family Tax Benefit (FTB) and is still required to take reasonable maintenance action.

If there are reverse cases, Centrelink must be advised both cases have ended and which children the election applies to. Centrelink may need to add coding to reflect that the other parent is taking reasonable maintenance action.

The SSO:

• Advises Centrelink that both cases have ended due to a payee election. See Centrelink-Child Support information exchange

For information specific to New Zealand cases, see NZ Reverse Case Processing attachment on the Resources page.

Duplicate letters may issue to customers who have a reverse case where the customer is recorded as the payee in 1 case and the payer in the other, for example when the customer lodges an estimate of income a letter will issue for each case, even though they are assessed to either pay child support as the ‘overall payer’ or receive child support as the ‘overall payee’.

In some instances, such as when a customer’s Post Separation Income (PSI) is accepted, a letter issues from both cases but without a case number specified.

After processing changes to reverse cases check that all letters issuing are appropriate.