Derived income for Child Support customers 277-07010020

A derived income may be a better income to use when:

• a taxable income has not been assessed by the Australian Taxation Office (ATO) for the Last Relevant Year of income (LRYI)
• the customer has not lodged a non-lodgement advice with the ATO, or
• the child support assessment uses a deemed or default income

In these circumstances, investigate whether to use a derived income as the adjusted income for the LRYI.

To review a currently derived income, go to Step 2.

For a new derived income, go to Step 3.

Conduct searches to determine if the customer has additional income not included in the derived income if:

• Cuba has automatically derived an income as a result of at least 10 months of income information received from Centrelink/Department of Veteran's Affairs, or an income has been manually derived, and
• the other customer has indicated the derived income is incorrect and has provided reliable information to support this. For example, they may refer to the customer’s history of inaccurate derived incomes or advise of a specific employer they work for in a previous financial year

If the searches provide additional information, go to Step 4.

If further information is required, go to Step 3.

Conduct the following preliminary searches to gather information that may assist the customer to provide accurate income details when contacted. Check:

• the External Information window for information received from Centrelink or Client Identification Compliance (CIDC), for example ATO and Centrelink information. Complete a CLNK refresh if last refresh date was more than 3 months ago
• the customer’s Income Details window for information received from Centrelink and DVA
• all communication/collection records for relevant information provided by the customer

Use the External searches guide to conduct general (Level 1) Australian Taxation Office (ATO) system searches, such as:

• ATO Transaction Search Facility (TSF) for both immediate and overnight searches
• ATO Integrated Core Processing (ICP) system for ATO registrations, forms, payments and accounting transactions. View:
• tax return for previous income and allowable tax deductions
• view lodgement status
• view all address details customer lodged with ATO
• bank details supplied by the customer to ATO
• ICP Index (suggested pathways to locate specific information), and
• ATO Tax Reform (TR) Corporate Applications for information about a customer's employer details, employment history and the name and address of an employer. This information may be used to send a section 161 notice to the employer, see Child Support's information gathering powers

Document any information gained from these searches.

Not required to lodge a tax return

A Child Support customer may not be required to lodge a tax return and may lodge a non-lodgement advice with the ATO. For more information, see Australian Taxation Office (ATO) income for Child Support customers.

Customers who have completed a non-lodgement advice with the ATO will have a 'Return not Necessary' or a 'Further Return not Necessary' (RNN or FRNN) indicator recorded against the relevant income tax years on their ATO records.

To check a customer’s lodgement status in ICP, go to the Client calendar > Received lodgements. The relevant financial year will have a lodgement status:

• ‘Return not necessary’ (RNN), or
• ‘Further Return not Necessary’ (FRNN)

This confirms the customer is not required to lodge a tax return as they have a taxable income below the tax-free threshold and therefore below the self-support amount. This does not necessarily mean their income is zero.

The customer's actual income information should be obtained via customer contact (lodgement of a customer derived income) and/or relevant investigation and system searches.

Note: NOTNEC and NRL are historical codes no longer used by the ATO.

See the Resources page for a link to the ATO website and search for lodgement program framework.

Go to Step 4.

Contact the customer and attempt to obtain a more accurate income by encouraging them to:

• lodge their tax return/s or a non-lodgement advice with the ATO
• provide a customer derived income, including all income sources and allowable tax deductions. See Table 2.
  If the customer does not have their income information available when contacted, explain they can provide a customer derived income online through their myGov account or on the Child Support Express Plus mobile app. See Accessing and using self service

If the customer is unable to be contacted and is registered for online services, send a CAL using the pre-approved Income tax declaration required. See Item 4 in CAL text options - for the pre-approved text.

If the customer is unable to be contacted and is not registered for online services, send an MX1-1 Request to Contact CSA letter, see Letters Cuba Process Help, Create a CAL. Include an:

• Income Declaration form (2008/2009) if the customer derived income required is for financial year 2008/2009 or earlier (or they were a WA ex-nuptial customer), or
• Income Declaration form (post 2009) if the customer derived income required is for financial years starting from 2009/2010 (and they are not a WA ex-nuptial customer)

If the customer responds to the MX-1 Request to contact CSA letter, see Table 2.

If the customer does not respond to the MX-1 Request to contact CSA and the income used is not accurate, see Table 3.

If 10 months of income information is available from Centrelink or the Department of Veterans' Affairs, see Table 4.

If:

• the customer has been contacted and advised of the importance of lodging a tax return or non-lodgement advice and that their income may not be backdated due to late lodgement rules, see Cuba rules for Child Support customers
• attempts have been made to obtain a more accurate income, including attempting to obtain a customer derived income and/or
• the Service Officer is satisfied that the most appropriate income is recorded

No further action is required at this time. Document the details of the call in the Client Income window.

A customer can supply a customer derived income verbally or in writing.

If the customer:

• is providing their income details online, go to Step 2
• is providing their income details verbally, go to Step 3
• is seeking to amend their customer derived income, go to Step 5
• already has a customer derived income recorded, go to Step 6

A customer derived income for a previous financial year (also known as Income Tax declaration) can be lodged online via myGov service or the Child Support Express Plus mobile app.

When a customer lodges an income via Child Support online, there is no option to select Income Tax Declaration. They will have to select 'Declare income for a previous financial year'.

This income will load to Cuba with the incorrect income type 'TAXABLE INCOME'. This means Cuba treats it as being similar to an ATO assessed income instead of a derived income and automatically applies it to the customer's record and the usual lodgement rules for income in Cuba apply.

A CS ONLINE ITD intray creates where management of the customer is by:

• deceased customers
• personalised services
• debt enforcement

The intray automatically allocates to the owning business area. The case manager will then manually record the income in Cuba, from the notepad in the customer Communication window.

Note: adding an income auto saves all eligibility information ‘I’ and warning ‘W’ changes, however the eligibility window is not visible in the income window.

Before adding manual income, Service Officers must check the eligibility window for accuracy. Review the assessment includes total number of children / relevant dependents in the calculation, complete and uncorrupted care records for all of the children / relevant dependents, reverse case has applied correctly with aligned CSPs and estimates.

If unable to resolve any ‘I’, ‘W’ or ‘E’ or the assessment or reverse case is not correct, do not add the derived income. Resolve the issues first, if required seek peer support or advice from a SSO.

Use the Income declaration macro to take the income information from the customer, including international incomes. Ask the customer for their Last Relevant Year of Income (LRYI) including:

• taxable income from salary and wage, including parental leave payments (post 1 January 2011)
• income from taxable pensions/payments
• incomes from specified tax-free pensions and payments (incomes from 1/7/2008)
• details, for example name, of taxable and tax-free pensions/payments
• the sources of income. For example, employer name
• details of allowable deductions
• details of other component income such as:
• taxable income from any other source
• taxable components of eligible termination payments or other lump sums
• taxable components of superannuation hardship withdrawals
• rental property losses (incomes after 1/7/1999 and before 1/7/2009)
• total net investment loss (incomes from 1/7/2009)
• reportable fringe benefits (incomes from 1/7/2000)
• exempt foreign income (incomes after 1/7/1999 and before 1/7/2008)
• target foreign income (incomes from 1/7/2008)
• reportable super contributions (incomes from 1/7/2009)
• how the amount was calculated
• employment type, name and average hours worked

For detailed information on the above components, see References for links to the Child Support Guide.

Department of Veterans' Affairs (DVA)

DVA pensions and benefits are only included in ATI if they are classified as taxable income or a specified tax-free pension or benefit. Some DVA pensions and benefits can be either taxable or non-taxable depending on the customer’s circumstances.

The only tax-free pensions and benefits specified for inclusion in ATI are paid through Centrelink or DVA and are:

• disability support pension under SSAct Part 2.3
• carer payment under SSAct Part 2.5
• invalidity service pension under the Veterans' Entitlements Act 1986 Part III Division 4
• partner service pension under the Veterans' Entitlements Act 1986 Part III Division 5
• income support supplement under the Veterans' Entitlements Act 1986 Part IIIA
• Defence Force Income Support Allowance under the Veterans' Entitlements Act 1986 Part VIIA

If a customer reports DVA income as part of a customer derived income or a DVA income is identified when manually deriving an income, determine the type of pension or benefit received. The customer will likely only know the name of their payment, not whether it falls into 1 of the categories of payment types listed above. Check whether the customer can confirm the payment type, check the customer’s Income Details window for income information received from Centrelink and DVA and check the External Information window in Cuba for information sourced from CIDC to assist in determining the income type.

Note: if the customer has an existing Cuba record when the DVA income exchange is performed at the end of each financial year, their income details will have been received and loaded into the income details window for that financial year. If the customer's Cuba record has been created after the data exchange occurred, the DVA income will not be available in Cuba for that year.

If there is any doubt a direct request to DVA must be issued before updating the income. See Direct requests for information from Department of Veterans' Affairs (DVA) (CS) for information about the process for making a request. Also to see a list of payment names included in the data exchange (only incomes that are included in a customer’s ATI are part of the data exchange, DVA payments which are not a component of ATI are not provided).

If information needs to be requested about Centrelink income, see Centrelink - Child Support information exchange.

Example: TPI (Total and Permanent Incapacity payment) is a term commonly used to refer to a number of different payment types. For example, special rate disability pension, superannuation, insurance. If a customer identifies they receive substantial income such as a TPI payment, make appropriate enquiries/investigation to determine whether their specific payment is a type which is included in ATI. If it is not, exclude it from the ATI being determined. Ensure the customer is aware that income which is not ordinarily included in their ATI may still be taken into account during:

• a COA process
• the decision-making process for an application that FAR not be used
• the decision-making process for an application to reduce MAR to nil

National Disability Insurance Scheme (NDIS), National Redress Scheme, Territories Stolen Generations Redress Scheme and First Home Super Saver (FHSS) Scheme

Payments (either ongoing or as a lump sum) received by customers under the NDIS, National Redress Scheme, Territories Stolen Generations Redress Scheme or FHSS Scheme are not considered income for Child Support purposes. If a customer provides NDIS, National Redress Scheme, Territories Stolen Generations Redress Scheme or FHSS Scheme payment(s) as an income source, or it is established the customer is receiving these payments, document for information only. See Documenting Child Support information. Do not include any income calculations. For more information, see National Disability Insurance Scheme, National Redress Scheme or Territories Stolen Generations Redress.

Explain to the customer that a customer derived income is a formal declaration of their income for a past financial year and should include all sources of income. The Service Officer must be satisfied that the income information provided is a reasonable approximation of the customer's adjusted taxable income. This may include:

• the customer providing written evidence to support their claim
• the customer's employment type and hours worked being consistent with the income amount provided
• third party information (TSF, ATO) supports the customer's claims

If a customer advises they are not required to lodge a tax return and they have:

• not reported this to the ATO, obtain a customer derived income and advise them to discuss their lodgement requirements with the ATO
• a 'Return not Necessary' (RNN), or a 'Further Return not Necessary' (FRNN) status recorded against the relevant income tax years on their ATO records, the customer is not required to lodge a tax return as they have a taxable income below the relevant year's self- support amount. Check income information to assist the customer to provide the customer derived income and determine if the customer derived income provided is a reasonable approximation of their income. Check:
• the customer’s Income Details window
• the External Information window for information sourced from CIDC
• ATO systems for all income sources and allowable tax deductions, and
• whether prescribed circumstances (Section 11) apply, see Exceptions to the income date of effect rules in certain circumstances

Example: information is located indicating the customer received $50,000 from a sole employer. Ask the customer if this was the only source of income they received or if they received additional income.

If there are any discrepancies in the information provided by the customer, investigate and verify the information before accepting the customer derived income. This may involve clarifying the information provided with the customer or contacting third parties such as employers, Centrelink, or checking ATO systems.

If not satisfied after further investigations that the customer derived income is accurate, do not use that customer derived income. For example, other income the customer is unwilling to include in their customer derived income or cannot explain, is found. Manually derive an income based on a combination of the customer derived income and the other information located. See Table 3.

Note: customers often confuse a customer derived income with an estimate. Clearly explain that a customer derived income relates to past income and an estimate relates to future income. Customers may need to provide a customer derived income to enable them to proceed with an estimate.

If the customer:

• has provided a customer derived income, go to Step 7
• cannot provide a customer derived income or be contacted, see Table 3

An amended customer derived income must be supported with reliable and accurate evidence. This evidence can be supplied verbally or in writing. Obtain amended customer derived income details and go to Step 3.

If a customer derived income is recorded in the customer's Client Income window, check the notepad and relevant documents about that customer derived income. Contact the customer and explain:

• the requirement for them to lodge a tax return if they are liable or recipient parent under a child support assessment
• lodgement rules
• not required to lodge. They need to lodge a non-lodgement advise (also known as a return not necessary) with ATO if they meets the criteria, see ATO website > Notify us if lodgement is not required
• consequences of non-lodgement

See Lodgement rules for incomes in Cuba.

If not satisfied that the customer derived income is a reasonable approximation of the customer's ATI, undertake further investigations. Go to Step 3.

No further action is required at this time if satisfied the customer derived income is an accurate reflection of the customer's ATI and the customer has been advised of:

• the importance of lodging a tax return
• the potential consequences of non-lodgement

Note: adding an income auto saves all eligibility information ‘I’ and warning ‘W’ changes, however the eligibility window is not visible in the income window.

Before adding manual income, Service Officers must check the eligibility window for accuracy. Review the assessment includes total number of children / relevant dependents in the calculation, complete and uncorrupted care records for all of the children / relevant dependents, reverse case has applied correctly with aligned CSPs and estimates.

If unable to resolve any ‘I’, ‘W’ or ‘E’ or the assessment or reverse case is not correct, do not add the derived income. Resolve the issues first, if required seek peer support or advice from a SSO.

Record the customer derived income if it is a new customer derived income and the Service Officer is satisfied it reflects the customer's actual income. See Income Cuba Process Help.

Select the Includes ISP checkbox if the Income field includes:

• income from taxable pensions and benefits and/or
• specified tax-free pensions or benefits

For more information about income support payments (ISP) and specified tax-free pensions or benefits, go to Step 3.

For further information, see the References page for links to the Child Support Guide.

If it is an amended customer derived income and will cause an overpayment, consult a SSO to confirm the decision to replace the customer derived income. This ensures the accuracy of the income declaration and possible effect on the assessment including:

• fixed annual rate (FAR)
• minimum annual rate (MAR)
• reduce minimum assessment to nil (RMA)

See Child support overpayments and other payee debt and Income Cuba Process Help, Update an income.

The usual Lodgement rules for incomes in Cuba determine the period for which the customer derived income will be used in the assessment. Cuba will not always automatically apply a customer derived income which is lower than the provisional income it is retrospectively replacing. If a customer advises of the customer derived income after the ordinary lodgement period (that is, 31^st of October) and the customer states they are going to lodge via a tax agent, and their taxable income can still be lodged on time, the customer derived income should apply from the first day the previous income was used. In this situation, the Notification Date needs to be entered as the start date of the child support period.

Document the reason for the income update and any supporting evidence in the Client Income window.

Go to Step 8.

Using the Income declaration macro document the following information in a notepad attached to the relevant income in the Client Income window.

• Customer derived income for financial year xx/xx
• Income from salary and wage, including parental leave payment (post January 2011)
• Details, for example name, of taxable and specified tax-free pensions/payments
• The sources of income, for example employer name, Services Australia
• Details of allowable deductions
• Details of other component income such as those listed in Step 3 above
• How the amount was calculated
• Employment type, name and average hours worked
• Legislative reference used to make the decision
• All discussions and attempted contacts with the customer, including whether prescribed circumstances (Section 11) apply. See Exceptions to the income date of effect rules in certain circumstances including steps about documenting the decision and notifying the customer

Go to Effect of income changes for Child Support customers.

If unable to obtain a customer derived income, manually derive an income. To manually derive an income, the customer must generally have received an income for at least 10 months of the Last Relevant Year of Income (LRYI). Based on the information gathered, determine the customer's likely income including:

• taxable income including salary, wages, allowances, and parental leave payments
• allowable tax deductions
• taxable pensions or payments
• income from specified tax-free pensions or payments (incomes from 1/7/2008).
  For more information about specified tax-free pensions or benefits see the References page for a link to the Child Support Guide
• details of other component income such as:
• taxable incomes form another source
• taxable components of eligible termination payment or other lump sums
• taxable components of superannuation hardship withdrawals
• rental property losses (incomes after 1/7/1999 and before 1/7/2009)
• total net investment loss (incomes from 1/7/2009)
• reportable fringe benefits (incomes from 1/7/2000)
• exempt foreign income (incomes after 1/7/1999 and before 1/7/2008)
• target foreign income (incomes from 1/7/2008)
• reportable super contributions (incomes from 1/7/2009)

Note: a period of incarceration counts towards 10 months of income. A period of full time study also counts towards 10 months of income for parents or carers under the age of 18 who have not yet begun earning income. This can be established if:

• the parent or carer was aged 18 or under
• we have been told they were a full time student (by them, by the other parent or by a third party such as Centrelink)
• they did not have a TFN, and
• they did not receive Centrelink benefits for the period

Not required to lodge tax return

If a customer has a 'Return not Necessary' (NNU) or a 'Further Return not Necessary' (FRNN) indicator recorded against the relevant income tax years on their ATO Income Tax records, this indicates they have a taxable income below the relevant year's self-support amount and may advise the ATO of non-lodgement. See Australian Taxation Office (ATO) income for Child Support customers. This does not necessarily mean the customer's income is zero. The customer's actual income information should be obtained from a customer derived income and/or relevant investigation and system searches.

Note: from the 2022/2023 financial year, if a customer has lodged an RNN with the ATO then an RNN deemed income is to be applied. See Deemed and Default income for Child Support customers.

Department of Veterans' Affairs (DVA)

If a customer reports a DVA income, request the information directly from DVA to determine the tax-free pension or benefit component of a customer's adjusted taxable income (ATI). See Table 2, Step 3.

National Disability Insurance Scheme, National Redress Scheme, Territories Stolen Generations Redress Scheme and First Home Super Saver (FHSS) Scheme

Payments (either ongoing or as a lump sum) received by customers under the NDIS, National Redress Scheme, Territories Stolen Generations Redress Scheme or FHSS Scheme are not considered as income for Child Support purposes. If a customer provides NDIS, National Redress Scheme, Territories Stolen Generations Redress Scheme or FHSS Scheme payment(s) as an income source, or it is established the customer is receiving these payments, document for information only, see Documenting Child Support information in Cuba. Do not include in any income calculations. For more information, see National Disability Insurance Scheme, National Redress Scheme or Territories Stolen Generations Redress.

Allowable deductions

Reasonable allowable tax deductions must be taken into account. When no current allowable deduction information is available, the decision maker may make a reasonable estimate of likely allowable deductions based on previous allowable deductions claimed by the customer.

The decision maker may inflate allowable deductions from the most recent previous tax return as if indexing an income, or use inflated allowable deductions information from particular previous tax returns where the pattern of earning is similar to the pattern of earning used to derive an income.

The reasons for determining the amount of likely allowable deductions must be clearly documented.

Example

John's previous tax assessments show 2 distinct patterns of earning. When John performs contract work allowable deductions are significantly higher than periods where John is an employee. The income information being used to derive John's 2015/16 income shows John performed mostly contract work in that year. John's most recent tax assessment for a year where mostly contract work was performed was 2012/13. The allowable deductions of $8,950 from that year are inflated and used as the allowable deductions in the derived income:

AWE amount for the December quarter of 2015/16 ÷ AWE amount for the December quarter of 2012/13 = $1,145.60 ÷ $1,080.30 = 1.060.

$8,950 x 1.060 = $9,487 allowable deductions for 2015/16.

Understanding Payment Summaries

When deriving a parent's income, the best source of information about their adjusted taxable income (ATI) is the parent themselves. Some payments may be taxable income in 1 parent's circumstances and not in another parent's circumstances. As a guide, see the Guide to understanding payment summaries table on the Resources page. Also consider information provided by the parent, or about the parent, from other sources such as third parties. For example, an employer and the ATO.

Deriving an income with less than 10 months income information should only be considered where there is evidence that the default or deemed income is significantly higher or lower than the customer's likely actual income.

The Service Officer must be satisfied that the information found represents the only source/s of income the customer has received during the financial year. General and specialised system searches must be undertaken, see the External searches guide.

Ensure the following:

• all possible sources of income have been checked
• any confirmed or likely allowable tax deductions have been considered
• the available income is significantly higher or lower than the deemed or the customer's past income history/occupation is, for example seasonal worker, supported by partner

Discuss the decision with a Service Support Officer before finalising.

Examples

Frank is currently assessed on 2/3 Male Total Average Weekly Earnings (MTAWE). Searches conducted have revealed that Frank earned $60,000 during 8 months of the LRYI. The Service Officer is unable to contact Frank to obtain a customer derived income. Frank's previous income history indicates the income earnt during part of the year is due to employment as Frank is a seasonal fruit picker. As there is no other income information available, the Registrar is satisfied that $60,000 is a more accurate income than 2/3 MTAWE.

Bella is currently assessed on 2/3 MTAWE. Search results revealed that Bella received $11,000 over a few months of the LRYI. Bella's previous incomes have been very low and there is no other information to suggest that any additional income is received during the LRYI. The Service Officer is unable to contact Bella to discuss the income or obtain a customer derived income. The Registrar is satisfied that $11,000 is a better income than 2/3 MTAWE.

When an income has been manually derived, go to Step 3.

Note: adding an income auto saves all eligibility information ‘I’ and warning ‘W’ changes, however the eligibility window is not visible in the income window.

Before adding manual income, Service Officers must check the eligibility window for accuracy. Review the assessment includes total number of children / relevant dependents in the calculation, complete and uncorrupted care records for all of the children / relevant dependents, reverse case has applied correctly with aligned CSPs and estimates.

If unable to resolve any ‘I’, ‘W’ or ‘E’ or the assessment or reverse case is not correct, do not add the derived income. Resolve the issues first, if required seek peer support or advice from a SSO.

Add the income in the Client Income window.

Select the Includes ISP checkbox if the Income field includes:

• income from taxable pensions and benefits and/or
• specified tax-free pensions or benefits

For more information about income support payments (ISP) and specified tax-free pensions or benefits, See Table 2, Step 3.

For further information, see the References page for links to the Child Support Guide.

Updating a derived income

If contact attempts were unsuccessful and new information has been located through searches, update the derived income.

If updating a derived income, delete the original derived income before adding the updated derived income.

If the Delete button is:

Not enabled - EL2 approval is required to delete the original derived income or to modify the effective date.

• Add the updated derived income, which takes effect from the keying date.
• Create a CSO – Potential Error in-tray on the customer whose income needs correction adding a correcting errors submission notepad (Cuba limited to 3,900 characters).
• Create a TSO online request with the copied notepad in the issue text field (Cuba limited to only 3,800 characters).
• The SSO verifies the TSO online request. If EL2 approval is required, the SSO will escalate to their Team Leader, the Team Leader will escalate to an EL2.
• The SSO will roll the CSO – Potential Error in-tray into a TSO –Error Correction in-tray to capture the existing notepad/s. Rolling is enabled by opening the existing in-tray notepad, closing the notepad but still staying in the original CSO – Potential Error in-tray, clicking on the New icon or File New and selecting the TSO –Error Correction and saving. SSO checks the existing notepad/s have rolled into the TSO –Error Correction in-tray notepads before routing the TSO –Error Correction in-tray to their relevant team SSO position for monitoring and Team Leader visibility.
• Once the SSO receives the EL2 approval, the SSO lodges a mySupport Cuba Service and Business Request form and attaches the EL2 approval. Only one request is required with both issues listed, that is, the Delete button is not enabled and the effective date must be overridden

Enabled – delete the original derived income, add the new derived income and follow the above ‘not enabled’ process to update the effective date.

Go to Step 4.

Document in the Client Income window:

• all discussions with the customer
• calculations
• details and results of any investigations made
• reasons for the decision
• any commitment made by the customer
• legislative reference used to make the decision

Go to Effect of income changes for Child Support customers.

When a new assessment is generated, Cuba has been programed to automatically derive an income for the Last Relevant Year of Income (LRYI) if 10 months of pension or benefit income information is available.

This information is received from Centrelink (CLK) or the Department of Veterans' Affairs (DVA) and can be viewed in the customer’s Income Details window. The External Information window shows incomes information sourced from CIDC. CIDC may record incomes that are not component of an ATI.

Check the derived income to ensure it is correct as the payment received may be a one off lump sum, or the customer may have received other income during the period they were eligible for benefits.

Non-taxable income information received from Centrelink or the Department of Veterans' Affairs is displayed in the Client Income window as non-taxable incomes. See Table 2, Step 3. See Direct requests for information from Department of Veterans' Affairs (DVA).

Note: if on review of a Cuba derived income, additional income has been sourced and a manually derived income has been determined as per Table 1, Step 2, see Lodgement rules for incomes in Cuba, Provisional income replacing a provisional income.

Income correction may be required if a customer received pension or benefit income in the LRYI, and the assessment is based on a deemed (or 2/3 MTAWE or indexed default) income.

• Follow the process in Table 3. Prior to applying the income to the customer's assessment determine the effect on the account if the manually derived income was backdated to the start of the Child Support Period (CSP)
• Retrospective income correction using a lower income should not occur if at the time of income correction the customer can no longer lodge a tax return on time and:
• replacing the income would result in no effect on the amount payable under the assessment, or
• an overpayment would result, or
• arrears would be created (receiving parent income replacement)
  Note: these guidelines apply for non-collect and collect cases
• Check the case to identify any issues that may have prevented Cuba from auto deriving the income such as a customer mismatch with CLK/DVA preventing the pension and benefit information from loading onto the customer's records. If this is the case seek SSO support to escalate the data transfer issue, see Technical Support in Child Support
• If the customer was not in receipt of a pension or benefit for 10 months or more of the financial year, and insufficient other information is found to correct the income, no further action is required

Where Cuba has automatically derived an income, check the income information is accurate.

Note: if the customer has not lodged a tax return in a number of years but receives income from Centrelink, Cuba will derive the customer's income based only on this income. Conduct searches to determine whether the customer has any other form of income.

If additional income is identified, attempt to contact the customer to obtain a customer derived income.

Centrelink administers payments of Paid Parental Leave. These payments are not an income support payment and the ISP checkbox must not be selected. This will allow a FAR assessment to generate if appropriate.

If the income information is correct, go to Step 4.

Document in the Client Income window:

• all discussions with the customer
• calculations
• details and results of any investigations made
• reasons for the decision
• any commitment made by the customer
• legislative reference used to make the decision