Financial hardship 277-04360000

Key

Capacity formula component

Effect on the capacity formula

A

Adjusted taxable income

Adjusted taxable income

The income used in the customer’s assessment. This is generally the Adjusted Taxable Income, which includes other income amounts from the last relevant year of income.

Current income can be used where information indicates it is significantly greater (>5%) than the income reflected in the assessment.

If the customer has multiple cases with different adjusted taxable income amounts use the income that most accurately represents their current capacity.

Check the Statement of Financial Details information to determine if a higher income should be used.

B

Less: Self support amount

Self support amount
The self support amount is 1/3 MTAWE recognising that separated parents need a level of disposable income for ordinary living expenses. This amount is automatically calculated by the Financial hardship macro.

C

Less: Additional necessary expenses

Additional necessary expenses

The amount of necessary expenses (per annum) that can be considered under hardship that exceed the self-support amount already allowed for above.

That is, the difference between these 2 amounts.

D

Less: Relevant dependent child amount

Relevant dependent child amount

Allowance provided to recognise the cost of supporting relevant dependent children (where applicable).

E

Less: Cost of children based on care

Cost of children based on care

Allowance made for the cost of children (while in the parent’s care), based on the level of care (total cost of child x cost %).

This amount is calculated by multiplying the cost of child amount by the payer or payee cost percentage for each child. Use the cost percentage relevant to the role of the parent with debt.

F

Less: Child support annual rate

Child support annual rate

Allowance for the annual rate/s of child support payable based on the current assessment/s. If there are multiple liabilities, then all annual rates are deducted.

G

Less: Tax payable

Tax payable

The approximate amount of individual tax required to be paid based on the customer’s taxable income. This amount is automatically calculated by the Financial hardship macro. Do not enter additional amounts such as HECS/HELP debts or the Medicare levy surcharge.

H

Equals: Disposable income - displays after clicking the Calculate disposable income and repayment amount button

Disposable income

The amount that represents a paying parent’s capacity to pay their child support debt, after taking into account the necessary expenses listed above (B, C, D, E, F and G).

Repayment under hardship amount -displays after clicking the Calculate disposable income and repayment amount button

Repayment under hardship amount

The amount the customer is required to pay, being 50% of the disposable income that takes into account additional necessary expenses under financial hardship.