Tax Refund Intercept Process (TRIP) exceptions 277-04340000

Cuba will automatically intercept or release a customer's tax refund in most circumstances. When Cuba cannot automatically determine how much of a tax refund to withhold a TRIP Exception intray creates. The intray routes to the Service Officer managing the customer or owning team.

Service Officers can also manually trigger a TRIP exception if necessary. See Step 5 in Table 8.

When actioning a Trip Exception intray, go to Step 2.

Use the TRIP - Submission and decision to intercept or release macro.

Investigate why the TRIP Exception intray created, by:

• accessing the TRIP Details window
• reviewing the customers' case/circumstances, and
• checking the Special Recovery Condition window notepad

Check if there is more than one exception reason. Cuba will only display one exception even if more than one condition is met. See Tax Refund Intercept Process (TRIP) Cuba Process Help.

TRIP exception reasons:

• Income Processing Error - Cuba has been unable to automatically process a new income
• Income Processing Exception Found - income did not transfer across from ATO
• Registration pending/recorded - a registration linked to the customer has a status of 'pending' or 'recorded'
• Change of Assessment pending - a Change of Assessment process is not yet finalised in Cuba but has a 'Review Outcome' code of:
• 'Variation to Increase/Decrease', or
• 'Agreement Accepted'
• Special Recovery condition recorded and not finalised - the customer has a 'Special Recovery Condition' such as 'payer bankrupt', 'payer hardship' or 'stay order', recorded against them with an 'End Date' today or in the future
• Special Recovery condition recorded and finalised - if customer is deceased. Go to Step 3
• Liability calculation required - an assessment variation has not been completed
• NAP pending - there is a prescribed or non-prescribed non-agency payment with a status of In Progress on any case linked to the customer
• Uncredited NAP - a liability or assessment ends with an uncredited NAP amount remaining on the child support account
• Income reassessment - an income reassessment results in a debt increase and the amount of the available refund is greater than the debt returned by the TRIPs calculation before the income reassessment was applied
• Estimate Income found - a customer has one or more estimates that have not been reconciled or reviewed. This exception will only occur if the available refund is greater than the current trip debt. To escalate to the Specialist Estimate teams, see Customer Referral Guidelines (CRG) > Estimate reconciliations
• Estimate not automatically reconciled - where Cuba is unable to automatically reconcile an estimate lodged after 1 July 2010 (or 3 March 2011 for WA ex-nuptial cases). Manual intervention is required to determine if reconciliation is required. To escalate to the Specialist Estimate teams, see Customer Referral Guidelines (CRG) > Estimate reconciliations
• Current Approved Payment Arrangement – the recorded payment arrangement:
• will not pay the full amount of maintenance debt and any consolidated revenue debt by the recorded end date, or
• is a non-EWA payment arrangement established within 30 days before the TRIP date, or
• is an interim arrangement
• Buffer Period - the buffer period exception reason may trigger because of a child support debt, overpayment or both. For more information see Step 8 in Table 3

TRIP exception intrays with the reason 'Special recovery condition recorded and finalised' will generate for Deceased Customers.

Tax refund amounts for deceased customers must not be collected. The usual administrative enforcement options (such as TRIPs and s72A notices) only apply to funds held for, or on behalf of, a debtor who owes a child support debt or overpayment. When a customer is deceased, their former assets no longer belong to them. The usual enforcement options cannot be applied.

Service Officer (SO4) must release tax refund amounts for deceased customers back to the Australian Taxation Office (ATO).

If a tax refund becomes available for a paying parent and the debt is owed to a person who is deceased or where a child is deceased, refer the Tax Refund Intercept (TRIP) intray to the Deceased Customer Management (DCM) team.

Investigate the customer's details for information affecting the decision to intercept the tax refund, including:

• the reason for any recent changes to the account
• issues that will affect the account balance, or
• any other issues that will need to be discussed with the customer when contacting them

Check the:

• incomes for accuracy
• intrays and indicators for the customer and associated customers. Look for:
• indicators of special circumstances, or
• intrays that indicate the liability may need to be changed or is inaccurate
• Payer/Payee Account Summary or Case Events windows for all cases the customer is involved in. Look for indications of recent changes to the liability or the case that might explain why the customer has a debt, e.g., income change.
• Recent Activity Summary (RAS) for recent communications to and from the customers
• Individual Customer Details window to determine if the customer’s address is valid. If not, take customer location action. See Customer location (tracing).

Document any issues that may affect the decision. See Documenting Child Support information.

Before processing the TRIP, resolve as many TRIP exception reasons as possible. The target is a 24 hour turnaround between the notification of a possible TRIP and its interception or release. Finalising any outstanding actions within 24 hours will ensure the accuracy of the:

• customer's account, and
• TRIP intercept decision

Use the TRIP - Submission and decision to intercept or release macro to document the reasons for the decision and reference the legislation used

Customer contact is generally not needed when actioning a TRIP exception, however, appropriate contact in line with contact with Child Support customers may be needed to finalise outstanding issues.

Make appropriate contact even if it means outstanding actions cannot be finalised within 24 hours.

When contacting the customer to finalise outstanding actions also discuss the interception of a tax refund.

If all the outstanding actions have been finalised, see the Table 4.

If required seek advice from a Service Support Officer (SSO)

If unable to finalise the outstanding actions within 24 hours, a hold of credit can be applied for a very short period of time while finalising action.

Verify what income to use and update Cuba accordingly before processing the TRIP.

See Income processing for Child Support customers.

Where possible, finalise the registration before processing the TRIP.

If presumption of parentage or other documentation is needed from the applicant, contact the customer to request they fax the documentation within the 24 hour timeframe. If a registration cannot be finalised within 24 hours keep the registration pended, then intercept the TRIP.

If the registration was recorded by another Service Officer, contact them before proceeding as there may be a critical reason why the registration is pending.

For more information about finalising registrations, see Applications for a child support assessment, Stage 1 - registrations or Agreements between Child Support customers.

Advise the Senior Case Officer (SCO) that a tax refund is available for interception. Ask if processing can be finalised before the 24 hour deadline. If the SCO cannot finalise processing within 24 hours, make a decision on the facts of the case as they currently stand.

Consider the reason for the Special Recovery Condition (specific information below) before making the decision to intercept or release the tax refund.

Client bankrupt

Bankruptcy does not necessarily affect a customer's obligation to pay their child support. It also does not prevent Services Australia from intercepting a tax refund. Create a Recovery Action Initiated intray to monitor the customer as the amount intercepted will generally reduce the provable debt. Check the provable debt record for the customer is updated on receipt of the refund. See Bankruptcy for Child Support customers.

Note: payee debts to the Commonwealth can be extinguished by bankruptcy. This means bankruptcy will prevent intercepting their tax refund.

Client agreement

A client agreement Special Recovery Condition may be used if there is a payment arrangement and/or debt offset arrangement in place.

Investigate the payment arrangement or debt offset details. Check the notepad in the Special Recovery Conditions window and the Payment Arrangements/Debt Offset window for details. See Record a special recovery condition.

If required, renegotiate the payment arrangement and/or review the debt offset arrangement depending on the current circumstances of the case. See Debt repayment and/or Debt offset.

Client hardship

If the customer has established financial hardship and there is a satisfactory payment arrangement in place, negotiate an amount to be refunded to the customer. See Step 4 in Table 4.

Financial hardship applications will not be considered and funds must not be refunded if the tax refund has been received before a financial hardship application has been lodged, and

• the payment was made towards child support arrears and is posted on the Payee Account Summary window, or
• the payment was made towards an overpayment and is posted on the Payer Account Summary window

Stay Order

Identify the type of stay order in place. Seek information or support from:

• stay orders
• the Child Support Guide 4.3.6: Applications, appeals and court orders under the Registration and Collection Act, the References page has links, or
• an SSO for clarification of the intent of the stay order

Is the stay order 'staying' collection?

• Yes, release the tax refund
• No, apply the tax refund to any part of the debt not affected by the order

Finalise the processing of the Cuba variation. If unsure how to complete the variation, access the relevant document listed below or seek help from an SSO.

If the customer calls before the liability calculation is finalised, contact the Service Officer who started processing the variation to gain all relevant information before taking action to finalise. There may be a critical reason why it has not yet been finalised. See:

• Change in child support care levels from 1 July 2018 (15 May 2019 for WA Ex-nuptial cases)
• Court varied assessments (CVA) including lump sum orders
• Updating Child Support customer information
• Terminating events (Stage 2)
• Stage 1 - variations
• Minimum annual rate to nil - Reducing child support assessments
• Ending a Child Support assessment

Finalise any NAP with a NAP Detail Status of in progress before intercepting the refund.

Service Officer did not start the processing of the NAP

If the customer calls before the NAP is processed, contact the Service Officer who started processing the NAP to gain all relevant information before taking action to finalise. There may be a critical reason why it has not yet been finalised.

The buffer period exception reason may trigger because of a child support debt, overpayment or both.

This exception will trigger when a tax refund notification is received for a customer:

• up to 4 days after the monthly payment due date, and the only outstanding debt is the previous month's liability. Go to Step 9
• for customers who owe a carer debt, up to 21 days after the overpayment first arose or increased. Go to Step 10

Determine which debt type(s) the customer owes in order to decide whether to:

• fully intercept the tax refund
• partially intercept the tax refund, or
• release the tax refund

If the only outstanding debt is the previous month's liability, contact the customer to determine if they have made the payment.

Release the tax refund if:

• the customer confirms a payment has been made for the monthly liability, and
• there is no other outstanding debt

If the outstanding debt includes child support and an overpayment that was raised or increased within 21 days of the tax refund notification:

• contact the other party to discuss their options, then
• contact the customer to determine whether they are aware of the overpayment

Release the tax refund if:

• the customer confirms a payment has been made for the:
• outstanding child support and overpayment, or
• monthly liability and they are not yet aware of the overpayment and the other party has not been asked about whether they wish for the overpayment to be recovered
• there is no other outstanding debt
• the other party instructs not to recover the overpayment

If the only debt is an overpayment generated or increased within the last 21 days:

• contact the other party to discuss their options, then
• contact the customer to determine whether they are aware of the overpayment

See Child Support overpayments and other payee debts.

Release the tax refund if:

• the customer confirms a payment has been made to repay the overpayment in full, and
• there is no other outstanding debt, or
• the other party instructs not to recover the overpayment

Determine when the overpayment occurred

• Go to the Payer Account Summary
• Find the entry with ‘Lia-Reduce Maintenance’ under the Details heading
• The date will be visible on the left

Note: double click the entry to display the period in which the downward adjustment occurred. This will help to understand why the overpayment occurred.

The delegation to release a tax refund when there is:

• a debt, is at the SO4 level
• no debt, is at the SO3 level

If the customer advises they have not made the payment in full, the tax refund should generally be intercepted to address the amount owing. However, discretion about intercepting or releasing the refund should be applied.

When discussing this with the customer, consider:

• history and relationship with the customer, and
• whether intercepting the tax refund will negatively impact the relationship with the customer

Review any current estimates and reconcile prior estimate periods. If the review or reconciliation process cannot be completed within 24 hours, do not delay the refund decision.

See Child support estimates review (Post 1 July 2010) and Child support estimates - Reconcile (from 1 July 2011).

To make a decision about the interception of a tax refund, consider the following:

• Is the debt to the Commonwealth correct? This includes child support debt, overpayments, late payment penalties or consolidated revenue debt
• Has the customer claimed that intercepting their tax refund will place them in financial hardship?
• If the only outstanding debt is the previous month's liability, has the customer advised they have made the payment?
• Has an arrangement been entered into with the customer to release part or all of the tax refund?
• Was the customer advised at the time of negotiating the payment arrangement that the tax refund will be taken and was this documented?

If the TRIP amount is different to the arrears amount, check for any unallocated payments in Cuba including:

• excess cash
• payments on hold
• previous TRIP amounts requested but not yet received
• payment reassignments which are keyed but not authorised, e.g., a refund of child support
• discharge pended subject to expiry of cooling-off period

Note: the TRIP details window will not display any details about the unallocated payments before the TRIP.

If there is no debt to the Commonwealth, release the tax refund.

Excluding costs and fines and estimate penalties, if the debt to the Commonwealth:

• is less than $10, the TRIP must be released. See Table 5
• is greater than $10, determine if customer contact is required, go to Step 2

Customers are regularly notified that their tax refund will be used to pay any overdue amounts. Customer contact is generally not required when actioning a TRIP Exception.

However, customer contact is required if any or all of the following circumstances exist:

• The only outstanding debt is the previous month's liability
• The customer has been given the expectation that Child Support will contact them before actioning the TRIP, e.g., due to financial hardship
• Recent action has occurred (including action in relation to the TRIP exception reason) that has resulted in an increase to the customer’s debt that the customer may not be aware of
• The TRIP amount will be applied to some or all of the new arrears amount
• A special recovery condition has been loaded due to a natural disaster

Make all reasonable attempts to contact Child Support customers before actioning the TRIP - 3 attempts over 24 hours.

Customer contact is required

Explain the:

• TRIP process and intended decision
• period of unpaid debt the TRIP will cover, including the dates
• next expected payment amount and the due date once the TRIP is received

If the customer will still owe arrears after receiving the TRIP, address this in accordance with the Customer Management Approach (CMA) process.

During the contact if the customer raises:

• new issues, resolve them during the phone call
• questions about the tax assessment, refer them to the Australian Taxation Office (ATO) website
• there may be an incorrect TFN, go to Step 3
• they are experiencing hardship, go to Step 4

Note: explain any unallocated payments to the customer when discussing the TRIP. Document details in Cuba

Customer contact is not required, or contact attempts are unsuccessful

Proceed with the decision using the available information. Document contact attempts in the notepad of the TRIP Details window. See Table 5.

If it is suspected that an incorrect TFN is recorded undertake more investigation:

• Confirm the correct tax file number with the customer
• Check the customer's TFN through ATO systems using their name and date of birth
• Compare the Cuba records to the ATO details. Use full name, date of birth, address and telephone number

If the TFN is incorrect, release the TRIP to the ATO before updating the customer record with correct TFN details. See Updating Child Support customer information.

Identify any privacy action required and refer to a team leader. See Privacy incidents. For a potential customer mismatch, refer the customer to the Solutions Gateway Team.

If an incorrect TFN was updated before the TRIP was released, it can only be released to the ATO by emailing CS ATO and DVA Relationships (CSADR). The email must include:

• new (correct) TFN
• old (incorrect) TFN
• refund amount
• refund year
• status date from the TRIP Details window

An electronic ATO legal notice must be issued before accessing ATO systems for customer information. See Legal notice for Child Support access to ATO data and systems.

If the customer claims that intercepting their tax refund will place them in hardship they must apply for recognition of financial hardship. A decision to release all or part of a customer’s tax refund due to financial hardship must be made by an SO6.

If an application for financial hardship is approved, request either a full 'Release' or a partial 'Intercept', of the Total Refund Amount as outlined in the decision.

The balance of the TRIP is managed by the ATO. For help intercepting a partial TRIP, see Table 1 in the Tax Refund Intercept Process (TRIP) Cuba Process Help.

If the customer does not establish they are in financial hardship, apply the whole amount of the refund against the debt.

Place a Hold Payment on the customer’s account if the total refund amount has been requested and:

• the TRIP has not yet been received
• a hardship claim has been lodged/approved

When the hardship claim is approved in part or full and the refund is received, contact an SSO to split the payment to issue a refund.

Financial hardship applications will not be considered and funds must not be refunded to the customer if the tax refund has been received:

• before a financial hardship application has been lodged, or
• the payment was made towards child support arrears and is posted on the Payee Account Summary window
• the payment was made towards an overpayment and is posted on the Payer Account Summary window

Check the delegation and authorisation levels before processing the decision in Cuba.

Document the decision using the TRIP - Submission and decision to intercept or release macro in the notepad on the TRIP Details window.

For more information, see:

• Documenting Child Support information
• Table 1 in the Tax Refund Intercept Process (TRIP) Cuba Process Help

If the Service Officer is at the correct authorisation level or a higher level officer has made their decision, process the decision in the TRIP Details window.

Does the payer have EWA in place?

• Yes, see Table 6
• No, procedure ends here

Will the applied tax refund clear the arrears on the customer's account?

• Yes, go to Step 2
• No, procedure ends here

After the tax refund is applied to the customer's account an updated PAD7-2 and PAD7-3 will auto generate to the employer and customer.

Check if a new schedule has been created.

Note: the EWA component should have been removed.

Is the schedule correct?

• Yes, procedure ends here
• No, go to Step 3

If a new schedule has not generated, request a manual schedule of deductions:

• Create a General Follow Up intray on the customer’s record
• Change the review date to 7 days from today’s date
• Add a notepad to the intray. Include details of the required deduction amount
• Route the intray to the ESO managing the customer’s employer. The ESO will issue a manual schedule to the employer

A customer with child support arears may request the Australian Taxation Office (ATO) release contributions made to a superannuation account, under the FHSS scheme. When they do, the credit will be available for interception.

Any tax credits made available for interception under this scheme are managed by:

• CS ATO and DVA Relationships (CSADR), and
• National Intensive Collection Services (ICS)

National ICS manages the process by:

• contacting the customer, and
• actioning the TRIP exception intray

If the customer is managed by a Service Officer due to other outstanding issues, National ICS will contact the Service Officer to discuss a collaborative case management approach.

Cuba automatically determines the total TRIP debt amount to intercept from a customer's tax refund using the balance of the customer's debt to the Commonwealth.

TRIP debt less or refunds less than $10 will be automatically released.

If taxable income information becomes available for a period where a default income is used to assess the liability, Cuba will automatically reassess that liability before determining how much refund to intercept.

An automatic reconciliation will also occur for estimate periods before 1 July 1999.

During all discussions about payment, advise customers with the following types of debt that any tax refund amount that becomes available will most likely be intercepted:

• Child support arrears
• Consolidated revenue debt, or
• Overpayments

There is no opportunity to notify the customer immediately before intercepting the tax refund unless there is a TRIP exception condition.

If a customer makes a payment arrangement, tell them they must notify Child Support of financial hardship before lodging a tax return. See the Child Support Guide 5.2.8: Tax refund intercepts.

This must be included when documenting the arrangement in the payment arrangement notepad.

A Special Recovery Condition (this is a TRIP exception condition) must be manually recorded for the refund not to be automatically intercepted.

See Record a special recovery condition.

When the refund becomes available, an intray will generate to prompt the customer owner to make a decision to:

• intercept the refund
• partially intercept the refund or in full, or
• release the refund

TRIP exceptions relating to funds released to customers via the FHSS scheme are managed by CS ATO and DVA Relationships (CSADR) and National Intensive Collection Services (ICS).

Do not action TRIP exceptions where the funds are from FHSS. Email the customer’s details to the National Intensive Collection Services.

If the customer’s tax refund has been intercepted and the credit from the refund is applied to the account, a CEO1 - Liable Parent TRIP letter will issue to the customer to notify them.