Child Support estimates review (Post 1 July 2010) 277-07050000

A customer must notify Child Support about any event that may affect the accuracy of their estimate. This requirement is outlined in the s160 notice sent to them when their estimate is accepted. Customers may also have been verbally advised of this requirement when the estimate election was taken.

An event is broadly defined

An event may include any change of circumstance not expected when the estimate was first lodged and may result in:

• an increase in income, for example the commencement of a new job, or
• a decrease in income, for example the non-payment of an expected contract fee

Events can include:

• the day a customer commencing or ceasing employment or overtime
• a customer begins or ceases to receive Parental Leave Payments
• promotion/demotion
• the gain or loss of a contract
• purchase or sale of a rental property (for investment purposes)
• commencing/ceasing a salary package which includes Reportable Fringe Benefits
• non-payment of expected transactions
• not commencing a new job/contract as expected

Note: payments under the National Disability Insurance Scheme (NDIS), National Redress Scheme, Territories Stolen Generations Redress Scheme or First Home Super Saver (FHSS) Scheme are not considered income for child support purposes and therefore are not regarded as events. The money does not count towards their ATI.

An event can also be defined as the first day on which the rate of a customer’s actual income exceeds the rate of the estimated income. This means the first day on which the estimate was ‘inaccurate’. An estimate could be inaccurate from its start date.

If a customer has advised of an event that affects the accuracy of their estimate, see Child support estimates.

If Child Support is notified or becomes aware of an event or a change that affects the accuracy of a customer's estimate it must be determined if:

• the estimate should be reviewed, and
• the assessment amended

Has the other customer told Child Support about the estimate’s inaccuracy?

• Yes, go to Step 3
• No, from another source listed below:
• a third party. For example an employer, s120 or s161 response
• provided for a change of assessment or objection decision
• received, directly or indirectly from other government agencies. For example Australian Taxation Office (ATO) - employment declaration or a tax return
• in a request from the customer to lodge another estimate
• obtained in an investigation conducted for an estimate reconciliation for an earlier child support period (CS Period)

Go to Step 6

If the other customer in the case contacts Child Support to advise they believe the estimate is inaccurate, an estimate review may be appropriate. Information they provide must be specific.

A customer can lodge an objection if they believe the estimate:

• should never have been accepted, or
• was not accurate on the day it was lodged by the estimating customer

The normal 28 day time limit and EOT provisions apply. For more information see Child Support objections.

If the other customer states the estimate became inaccurate after being lodged Child Support will take certain actions depending on whether the customer provides:

• no information or general information, go to Step 4
• specific information, go to Step 5

If the other customer provides no information or information of a general nature quickly check:

• ATO systems, and
• Cuba

There may be more specific details recorded there. This may lead to further investigation of the estimate.

If no information is found advise the customer:

• Child Support cannot take any action at this stage, and
• if Child Support becomes aware of more specific information or a specific event, an estimate review can be considered

Consider the following:

• The ATI stated in the estimate may be accurate but matters expressed by the other customer could indicate the assessment is unfair
• Is it appropriate to discuss the option of Change of assessment in special circumstances?

Examples of no information or general information

‘They always lie’

‘They work cash in hand – how else can they afford to go on holidays?’

‘The children say that Tarek told them they are now doing some casual work’

‘A friend told me that they saw Vicky in a bank uniform while shopping the other night. Vicky's last job was as a customer service officer’.

If no action is required, on the Estimate notepad on the Client Income window document both:

• the information provided, and
• the decision not to proceed

Procedure ends here

If the other customer has specific detail about the estimate’s accuracy, advise them it can only be changed if there is enough information to determine the estimate is inaccurate.

Examples of specific information

‘I saw Rose driving a ute with an ABC Homes Pty Ltd logo on the side. Rose is a builder by trade’

‘Tarek told me directly that due to a work commitment on Saturday they can’t pick up the kids’.

Is there enough specific information to warrant more investigation?

• Yes, go to Step 6
• No, procedure ends here

If there is enough specific information for an estimate review:

• create an Estimate Review Required intray, and
• document in the notepad the factual information available. Include which estimate may need to be reviewed and why

Investigate the estimating customer’s circumstances using the information available, including:

• Cuba's Benefits screen
• ATO systems to check for employment declarations, tax returns etc.
• other information in Cuba such as:
• discussions regarding income, including the estimate notepads
• details of any relevant investigations Child Support has undertaken
• section 161 and section 120 responses
• change of assessment or objection application, responses or decisions

Using available resources determine whether:

• the income received by the customer is the same as the estimated income, and
• there are any events likely to have affected the accuracy of the estimate

If an event date cannot be identified, gather income information for the whole estimate period.

Note: payments under the National Disability Insurance Scheme (NDIS), National Redress Scheme, Territories Stolen Generations Redress Scheme or First Home Super Saver (FHSS) Scheme are not counted towards their taxable income.

Does the investigation indicate the estimate may not be accurate?

• Yes, go to Step 3
• No, go to Step 2

If the estimate appears to still be accurate and no details need clarification, advise the customer initiating the review that no further action will be taken at this time.

In the Client Income window on the notepad of the estimate being reviewed, document the:

• information provided by the initiating customer
• details of the review and
• decision not to proceed

Procedure ends here

Document discussions and contact attempts in a notepad on the estimate being reviewed.

Contact the customer to discuss the following details:

• Child Support’s estimate, review and reconciliation processes
• The consequences of not keeping Child Support up to date like delayed correction of the income and arrears
• The accuracy of their estimate. That is, comparing the estimated income with the actual income received since the start date of the estimate

See Contact with Child Support customers

The customer may be unfamiliar with the estimate processes.

It is essential they are actively involved in keeping their estimate accurate.

If it is identified that the estimate is inaccurate, determine:

• the date(s) the estimate became inaccurate
• the actual taxable income and other component amounts earned from the date the estimate became inaccurate until present
• the amount of adjusted taxable income likely to be received for the remainder of the financial year

If the customer cannot provide the details during the call, ask that the details be provided within a reasonable time frame. See standard response times in Contact with Child Support customers. Document the due date for the information requested.

If unable to contact the customer by phone, send a Please Contact letter. Use the pre-approved text for an estimate review in Letters Cuba Process Help.

If the customer has been unable or unwilling to provide the required details by the due date, go to Step 4.

If the customer has been contacted and they have provided all required details, go to Step 7.

Where possible use the telephone and make informal enquiries.

Before seeking information from a third party check if the customer or a third party has previously provided the information

• Cuba (including Centrelink data and COA information)
• ATO systems, and
• any correspondence from another government department, for example the Department of Home Affairs

Issue a section 161 notice where information or previous investigations indicate that the estimate is inaccurate and the customer:

• cannot be contacted
• is unable or unwilling to provide all relevant income information, or
• has provided information but there are compelling reasons to doubt its completeness or accuracy

Note: for the purposes of an estimate review, issue section 161 notices sparingly. These notices are time intensive for both Child Support and the third party who receives the notice.

A section 161 notice should only request details of the income received from the start of the estimate period until the present. This may require the issuing of a unique schedule - for example a unique schedule to the employer. See Separated parents letter and email templates, Schedules - S161 and S120.

The information that may be requested includes:

• employment income, including details of payments
• details of contracts, including detailing of remuneration and terms
• financial statements from a property manager for rental properties
• bank statements - to assist in ascertaining cash flow
• dividend and interest income, and
• profit and loss statements
• Centrelink income. See Centrelink-Child Support information exchange
• Department of Veterans’ Affairs income. See Direct requests for information from Department of Veterans' Affairs (DVA) (CS).

Document the issuing of a section 161 in a notepad on the estimate being reviewed.

For more information see Child Support's information gathering powers and Section 120/161 notice Cuba process help.

Consider issuing a section 161 notice on the estimating customer themselves. The Registrar will only review an estimate under CSA Act section 63B if:

• every attempt has been made to contact the customer but they cannot, or will not, provide any information or make a new estimate
• all efforts to gather income information from third parties have been exhausted, and
• there is still not enough reliable information to proceed with an amendment under CSA Act section 63A

For reviewing purposes, generally only issue s161 notices to third parties to gather and confirm income information.

A section 161 notice should rarely be issued to the estimating customer.

If the estimating customer responds to an s161 notice within 14 days, only amend their estimate from the response date.

This is even if Child Support becomes aware of an earlier event that affects the accuracy of the estimate.

Do not issue an s161 on the estimating customer if the estimate is able to be reconciled at the end of the period. Do not proceed with an estimate review.

Allow the estimate to be reviewed or reconciled later when more reliable information is available.

The preferred option is for the customer to make a subsequent estimate for the financial year.

If the customer wishes to make a subsequent estimate election, see Child support estimates.

If the customer refuses to lodge a subsequent estimate and there is clear evidence the increase in the expected ATI is greater than 10%, amend the assessment.

Consider if there is enough information or more investigation is required.

Example

An s161 employer response identifies income for 3 months and the customer ceased work 16 November 2019. More investigation is required to determine whether the customer has any source of income after that date.

If the customer is working again or receiving benefits Child Support needs to:

• determine their income, and
• include it in the estimate review

In this case Child Support finds the customer’s income for the remaining period 17 November 2019 to 30 June 2020 is likely to be zero. They are incarcerated. It is appropriate to record zero as their income for the remaining period.

However if the Service Officer cannot be satisfied of the customer’s income for the remaining period, a review would not be appropriate.

After assessing the information available determine the:

• date of the event or change, go to Step 9
• income to amend the assessment, go to Step 10

Record the date of the identifiable event that resulted in a change to the customer’s income. The event date will be either:

• supplied by the customer, or
• confirmed through the investigation

If a specific date cannot be identified or confirmed, select the most likely event date. Be aware the estimate could be inaccurate from its start date.

If there are multiple event dates (because a customer's income changed a number of times) the earliest date would be used as the event date for the review.

Section 161 to the customer

If a section 161 notice is issued to the customer, the assessment can only be amended for those days in the CS Period occurring on or after the day the customer complies. References has a link to section 63B.

Determine the income to be used to amend the assessment. This is the amount of the taxable income plus other components amounts (adjusted taxable income amount) from the event date to the end of the financial year, annualised.

Note: taxable income will generally be the income a customer receives less allowable deductions. Ensure allowable deductions are discussed with the customer when confirming the taxable income. All of the components of the ATI must be discussed so all relevant components are included.

As the assessment is to be amended from a date in the past, gather the income information in 2 steps.

Step 1

Calculate the actual taxable income and other component amounts earned by the customer from the amendment date until today

Step 2

The amount of taxable income and other component amounts the customer is likely to earn for the remainder of the financial year

The income to be used will be the sum of Steps 1 and 2.

The investigation may indicate the estimate is:

• still accurate, or there is not enough information available to amend the assessment. Go to Step 12
• no longer accurate and the assessment should be amended:
• Document the findings of the investigation. For example s161 income details
• See Table 3 Confirm details with customer

• In a notepad on the estimate being reviewed, document:
• the findings of the investigation, for example the s161 income details and
• the investigation’s outcome
• If the review was initiated by information provided by the other customer, contact them to advise:
• the review has been finalised, and
• there will be no change to the assessment

No further action is required at this time. The estimate will need to be reconciled in the future. For more information see Child support estimates - Reconcile (from 1 July 2011)

Once the date the assessment needs to be amended from and the income to be used are identified, contact the estimating customer to confirm this information.

When confirming information, discuss the:

• date the estimate became inaccurate
• income information used in the review. For example sources and amounts, including allowable deductions
• annual income that will be used to amend the assessment, and
• effect on the assessment

If appropriate, discuss again the possibility of the customer making a subsequent estimate. See Child support estimates.

A customer may disagree with the effect of the review or the new annual income amount. However, if they agree with the dates and details of the income used to determine the reviewing income they have confirmed the details.

If the customer:

• disagrees that the estimate is inaccurate or with the income to be used to amend the assessment, go to Step 2
• disagrees with the review or is unable to be contacted, go to Step 4
• confirms the estimate income, dates etc. See Table 4 Finalise and amend if appropriate

Ask the customer to explain why they disagree about:

• the estimate being inaccurate, or
• the income figure Child Support will use to amend the assessment

Discuss:

• the customer’s sources of income during the relevant period. For example employers, lump sum payments, contracts
• periods over which they received this income
• allowable deductions
• any other relevant information

Does the customer have new information to provide?

• Yes, go to Step 3
• No, go to Step 6

International

When reviewing an estimate from a customer who is not in Australia, seek documentary evidence to support the customer's claims. If no evidence is available or supplied, refer to a Service Support Officer (SSO). The SSO will decide to review and amend the estimate or not.

Customer information different from that gathered

Attempt to clarify the information with them. If the matter

• is resolved, go to Step 4
• cannot be resolved, consider the customer’s estimate history

Good estimate history

A customer will be considered to have a good estimate history if they have not significantly underestimated in the past without good reason.

A significant underestimation is defined as more than 10% - the actual income was more than 110% of the estimate.

What constitutes good reason is a matter of judgement. A customer who under-estimated because of an obvious misunderstanding could be considered to have under-estimated with good reason.

Is there reason to doubt the accuracy of the customer’s new information?

If the customer:

• does not have a good estimate history, request written supporting evidence
• does have a good estimate history, consider if more supporting evidence is necessary or not

Is the matter unresolved?

If the customer cannot or will not supply satisfactory evidence, go to Step 6

If satisfied the information provided by the customer is correct, go to Step 4

The customer may provide information that contradicts, enhances or clarifies the information gathered previously.

If Child Support is satisfied this new information is correct, reconsider the decision about:

• whether the review should take place at all
• the date of the event
• the income to be used to amend the assessment

Information in Table 2 - Investigation maybe useful to do this. Return to this step after decisions have been made.

• The review shows that action to amend the assessment is not required:
• Document the customer’s information and the decision in a notepad on the existing estimate in the Client income window. See Documenting Child Support information
• If the review was initiated by information provided by the other customer, contact that customer. Advise them the review has been finalised. At this time there will be no change to the assessment. The estimate will need to be reconciled in the future. See Child support estimates - Reconcile (from 1 July 2011)
• Procedure ends here
• The review shows that action to amend the assessment is still required:
• Confirm the date and amount of the estimate review with the customer. See Table 4

Decide if the review will proceed if the customer:

• disagrees with the income identified and does not supply satisfactory evidence, or
• cannot be contacted

Only proceed with an estimate review in these circumstances if:

• there is reliable information about the event and income received since the event, and
• the annualised income identified will exceed the estimate of income by more than 10%

Document all:

• attempts to contact the estimating customer, and
• discussions with them, including their reasons for not agreeing to the review

See Documenting Child Support information.

If the assessment is not amended after the estimate review, document:

• the reason for the decision, and
• all customer contact on the notepad on the existing estimate

If the review was initiated by information provided by the other customer, contact that customer and advise that the review has been finalised and at this time, there will be no change to the assessment.

Procedure ends here until the estimate is reconciled in the future. See Child support estimates.

To record an estimate amendment in Cuba, decide which type of estimate amendment is required.

Cuba allows for 2 types of estimate review to be loaded in the Estimate Income window. These 2 types are called:

• CSA Amended EST, and
• CLI Amended EST

CLI Amended EST is used for subsequent estimates lodged by the customer. See Child support estimates.

If the customer is not lodging a subsequent estimate, record the amendment as a CSA Amended EST.

Resources has information about Income estimate scenarios and FAQ income estimates.

Load the estimate amendment into Cuba:

• from the Client Income window > open an existing estimate income with a status of Currently Used
• in the Estimate Income window > from the Edit menu > select the Amend Estimate
• the Type field is now enabled > select CSA Amended EST
• update the Notification Date field to indicate the date the estimate amendment is to take effect from. In most cases this is the actual date of event. Consider the note below
• record the actual date of event. Consider the note below
• complete all required fields in the estimate calculator

Note: a rare situation occurs when a customer advises of an event within 14 days of the event, but does not want to lodge a subsequent estimate:

• record the date of notification in the date of event field in the CSA Amended Estimate
• the actual date of event is not recorded in this circumstance

Before accepting an estimate amendment check the following:

• the estimate amendment is applied to the correct estimate
• the estimate amendment is applied to all applicable cases, including any reverse cases
• all relevant information is recorded, including:
• date of event, date amendment takes effect
• the information used to determine the amended income
• attempts at contacting the customers and discussions with them, and
• any previous estimate in the financial has been reviewed or is in the process of being reviewed

All authorising officers must document their decision in a notepad.

Note: document the reasons for the decision and reference the legislation used to make the decision. See Documenting Child Support information

When the estimate amendment is accepted the amended income is used to amend the child support assessment.

Check the case liability rates for all affected cases. Ensure the amended estimate has the effect expected from the correct date. If required seek help from an SSO.

If the estimate is amended Cuba will automatically generate the following letters:

• ME3-1 To a payee advising that an estimate has been amended
• ME3-2 To a payer advising that an estimate has been amended

The correct paragraph about the change will be added by the system to these letters when the amended assessment results in:

• increased arrears
• overpayments, or
• adjustments to employer withholding deductions etc.