Child Support estimates - Reconcile (Pre 1 July 2011) 277-07090000

Overpayments

In rare circumstances, overpayments may result if:

Child Support reviewed the payer’s estimate at some stage but used an adjusted taxable income amount that was higher than their actual income
the payer has been relatively up to date with their child support payments before and during the estimate period, or
the payee underestimated their actual income

If an overpayment occurs, see Child support overpayments and other payee debt.

Examples of when Child Support can and cannot reconcile

Table 1

Item	Examples
1	Example 1 Susan lodged an estimate on 27 May 2008 for the new child support period 1 July 2008 to 30 September 2009. Susan estimated earning $15000 over the full 15 months of the child support period (annualised to $12000). Susan’s 2008/2009 tax return issues on 2 August 2009 and a new child support period commences from 1 September 2009. When can Child Support reconcile: From 1 October 2009 The end of Susan’s estimate period is 30 September 2009 and the child support period ended on 31 August 2009. Therefore the earliest that can be reconciled is 1 October 2009. Note: if the 2009/10 tax return has not issued, income details needs to be determined from the customer, third parties and/or other sources available to Child Support. For example, Change of Assessment applications, ATO system information, Centrelink and/or other income sources used when arriving at an indicative income.
2	Example 2 Jason lodged an estimate on 29 June 2008 for the new child support period 1 July 2008 to 30 September 2009. Jason elected to make a 12-month estimate for the period 1 July 2008 to 30 June 2009 for $25000. Jason's 2008/2009 tax return issues on 13 July 2009 and a new child support period commences from 1 August 2009. When can Child Support reconcile: From 1 August 2009 The end of Jason's estimate period is 30 June 2009 and the child support period ended on 31 July 2009.
3	Example 3 Van lodged an estimate on 29 July 2008 during the child support period 1 July 2008 to 30 September 2009. Van elected to make a 12-month estimate for the period 29 July 2008 to 28 July 2009 for $20,000. Van’s 2008/2009 tax return issues on 7 August 2009 and Child Support commence a new child support period from 1 September 2009. When can Child Support reconcile: From 1 September 2009 The end of Van’s estimate period is 28 July 2009 and the child support period ended on 31 August 2009. Therefore the earliest that can be reconciled is 1 September 2009.
4	Example 4 Thi lodged an estimate on 15 December 2008 during the child support period 1 July 2008 to 30 September 2009. Thi estimated earning $53000 for the remaining period 15 December 2008 to 30 September 2009. On 1 March 2009 Child Support accept an agreement from Thi (PYR) and Van (PYE) which fixed the annual rate of child support at $10000 effective from that same date. A new child support period therefore commences on 1 March 2009. When can Child Support reconcile: From 1 October 2009 Although the child support period ended on 28 February 2009, the end of This estimate period is 30 September 2009. Therefore the earliest that can be reconciled is 1 October 2009.
5	When a Child Support period ends early, a reconciliation can only occur if the customer's estimated income is less than the actual income. Compare the actual income against the estimated income in the estimate period, irrespective of any events that have occurred, for example, the commencement of a new child support period. The reconciled income is based on whether the estimated income was lower than the actual income, in which case, the actual income in that period will be used in the assessment. This reconciled income will only be applied to the periods still affected by the estimate. Example Deborah's original child support period ran from 1 July 2008 to 30 September 2009. Deborah estimated earning $12,000 for the first 12 months of the child support period. Deborah’s 2008/2009 tax return issued on 2 August 2009 for $30,000 resulting in a new child support period commencing 1 September 2009. This is more than the original estimate that the customer provided. Reconcile the customer's original estimate using the actual income over the original estimate period. However, only amend the assessment using the reconciled income for any days in the period still affected by the estimate. Reconciliation results in the $12,000 estimate being replaced by the actual income of $30,000 per annum for the period 1 July 2008 to 31 August 2009.

Estimate reconciliation specific terms

Table 2

Item	Definition
1	Aggregated income The aggregated income is a total of all the incomes used in an assessment in a given tax year. For example: Financial Year 01/07/2008 - 30/06/2009 Income periods 01/07/2008 to 30/09/2008 (92 Days) CSI - $20,000 Source - 07/08/TI Sub Total - $5041 (92 / 365 x $20,000) 01/10/2008 to 31/10/2008 (31 Days) CSI - Nil Source - Estimate Sub Total - Nil 01/11/2008 to 30/04/2009 (181 Days) CSI - $30,000 Source - Estimate Review Sub Total - $14,877 (181 /365 x $30,000) 01/05/2009 to 30/06/2009 (61 Days) CSI - $10,000 Source - Estimate Sub Total - $1671 (61 / 365 x $10,000) Aggregate Income - $21589 ($5041 + $0.00 + $14877 + $1671)
2	Estimate period The estimate period is the period for which the customer estimated when they first lodged their estimate. This is distinct from the period that may be affected by the estimate. Once an estimate is accepted, the estimate period cannot be altered by future events such as the acceptance of a new estimate or the commencement of a new child support period. This is despite the fact that the estimate itself may cease to affect the assessment for later parts of the original estimate period. The estimate period is important when considering an estimate review or reconciliation.
3	Good estimate history A customer will generally 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% (t the actual income was 110% or more of the estimate). What constitutes good reason will be a matter of judgement. A customer who underestimated because of a clearly identified misunderstanding could be considered to have underestimated with good reason.
4	Indicative income The indicative income is a calculation of the likely income that has been earned during an estimate period. This income can be used to encourage the customer to provide actual income information where this is not readily available. If the customer is persistently unwilling to cooperate use the indicative income as the reconciling income.
5	System check no change estimate reconciling status This status has been applied to the estimate by Cuba and indicates that no further investigation for reconciliation purposes is required at this time. If more information is received about the customer's income (for example, amended taxable income, information from an employer) or a request to investigate the accuracy of the estimate is made (for example, payee complaint, customer request), the estimate should be reconciled. Reconcile the estimate.

Macro

Estimate Reconciliation Checklist

Estimate reconciliation calculator

The calculator in Cuba must be used to decide if an estimate reconciliation is necessary based on preliminary information such as income tax assessments. It helps to determine if the customer's actual income is likely to be above or below the estimated income.

It helps to work out an indicative income for the estimate period that can be a starting point for discussions with the customer to determine their actual income for the estimate period.