Managing changes affecting a Child Support agreement 277-18030100

Customers must inform Services Australia if there is a change in their income, employment, care or any circumstance or event that is covered by their child support agreement . This is to ensure the activation or deactivation of any applicable agreement clauses and to ensure that notional assessment details are correct.

A customer will normally advise if there has been a change in circumstances that requires activation or de-activation of a clause in their agreement. The agency may also become aware that a clause requires activation.

Review the agreement, located in the View Correspondence window or the Case window notepad to see if there are any clauses or provisions.

Note: read the whole agreement as there may be multiple clauses that combine together to affect the child support agreement.

Go to Step 4 for further details on agreement clauses.

Check previous discussions with the customers about clauses before the agreement was accepted, to clarify their understanding of the effect and limitations.

Consider:

• how the agency is to test whether the clause should be applied
• if any evidence is needed before the clause can be applied
• what date the clause will affect the assessment if it is applied especially if there is any delay in notifying Child Support about the changed circumstances
• whether the clause ceases to have effect if the circumstances change again and if so:
• from what date the clause will cease to have effect, and
• what agreement rate will then be applicable again

Note: discussions with the customers may be recorded in the Additional Registration Details window, Case notepad or in the individual customer’s communication.

For more information on:

• Unemployment clause, go to Step 5
• Low income/Reduced income/Changed income clause, go to Step 7
• Specified events clause, affecting periodic child support or non-periodic child support, go to Step 7
• Change in care clause, go to Step 9
• Role swap clause, go to Step 14
• Terminating or suspension clause, go to Step 15

Note: the payee ceasing to be an eligible carer in circumstances that is not a terminating event (such as a child moving between parents where after the care change one parent is still an eligible carer) may be covered in a care change clause, but not all agreements fully cover this possibility. See Suspending or ending a Child Support agreement due to care.

Unemployment clauses are usually activated when customers are in receipt of a Centrelink benefit, but this will depend on the specific wording of the clause. Check the unemployment clause to determine if it can be activated. If evidence of unemployment is required, request this from the customer.

The unemployment clause may specify when the unemployment clause should be activated or de-activated.

Can the clause be activated or de-activated?

• Yes, go to Step 6
• No, if the clause cannot be activated or there is no unemployment clause, advise the customer there will be no change to the agreement provisions. Explain other options such as:
• making a new agreement with the other party. See Agreements between Child Support customers
• how child support agreements can be ended. See Ending a Child Support agreement

Activate or de-activate the unemployment clause in the Clauses window.

If the unemployment clause cannot be activated or de-activated in the Clauses window obtain assistance from a Service Support Officer (SSO) to manually adjust the details in Periodic amounts or Formula Modification.

Note: the wording of the clause may prevent it from being recorded in the Clauses window.

Document the decision in the case notepad.

Go to Step 14.

There is no standard format to these clauses and the wording of each particular agreement will determine what event or circumstances will cause a clause to be activated.

Check each clause that may cover the event or circumstances. Note: read the whole agreement as there may be multiple clauses that combine together to affect the child support agreement. If required request evidence from the customer.

The clause may also specify when the clause should de-activated.

Can the clause be activated or deactivated?

• Yes, go to Step 8
• No, if the clause cannot be activated or there is no clause that covers the customer’s situation, advise the customer there will be no change to the agreement provisions. Explain other options such as:
• making a new agreement with the other party. See Agreements between Child Support customers
• how child support agreements can be ended. See Ending a Child Support agreement

Activate or de-activate the clause in the Clauses window. If the clause cannot be automatically activated or de-activated manually adjust the details in Periodic Amounts or Formula modification window.

Note: the wording of the clause may prevent it from being recorded in the Clauses window.

If required obtain assistance from a SSO.

Document the decision in the case notepad.

Go to Step 14.

If care changes for a child covered by an agreement, the effect on the agreement or assessment will depend on whether the payee continues to be an eligible carer with at least 35% care of the child, and if the agreement contains any provisions dealing with the care change. For information on the date of effect of care changes rates, see Step 14 in Table 1 of Interpreting and making a decision on a Child Support agreement.

If the payee continues to be an eligible carer with at least 35% care of the child

If the agreement contains a clause that governs the rate of child support payable if care changes, and the payee is still an eligible carer with at least 35% care of the child, go to Step 10.If the agreement has a clause that allows the roles of payee and payer to swap when care changes, go to Step 14.

If the payee ceases to be an eligible carer with at least 35% care of the child, but a terminating event has not occurred

• if the agreement has a clause that allows the roles of payee and payer to swap when the payee ceases to be an eligible carer, go to Step 14
• If the agreement does not have a clause that allows the roles of payee and payer to swap when care changes and the payee ceases to be an eligible carer, the agreement will end for the child or may be suspended for a period see Suspending or Ending a Child Support agreement due to care
• if the agreement has a clause that the child support liability will cease to be payable if the payee ceases to be an eligible carer the agreement depending on the wording of the agreement clause. Go to Step 15
  Note: if the agreement ends or is suspended for one child, but continues for another child of the same child support case, a mixed assessment adjustment may be needed, Complex system processing for reverse child support cases.

If the payee ceases to be an eligible carer with at least 35% care of the child and a terminating event has occurred see Terminating Events (Stage 2) and Ending a child support agreement.

Until 15 May 2019 the agreement liability would continue to be payable for that child where:

• the child support case involved ex-nuptial children living in Western Australia (WA), and
• the payee ceased to be an eligible carer of a child, and
• there was no terminating event

See WA Ex-nuptial child support case - Payee ceases to be an eligible carer with no terminating event and the agreement still applies - Pre 15 May 2019 and escalate to a Program Support Manager.

There is no standard format to a care change clause, the wording of each particular agreement will determine what event or circumstances will cause a care change clause to be activated.

Read the whole agreement as there may be multiple clauses that combine to affect the child support agreement.

An agreement may have clauses on how care is assessed for the purposes of administrating the agreement care change clause. If the agreement has no such clauses, apply the standard Assessment Act provisions to assess the level of care. See Change in child support care levels from 1 July 2018 (15 May 2019 for WA Ex-nuptial cases).

An agreement can include provisions covering what the date of effect of the agreement rate change will be, either by referring to the standard Assessment Act rules about the date of effect of care changes or by specifying its own requirements, see Change in child support care levels from 1 July 2018 (15 May 2019 for WA Ex-nuptial cases).

Note: an agreement cannot change the ordinary operation of the Child Support (Assessment) Act (1989) but can specify how and when the agreement rate changes. In some circumstances, the Assessment Act rules for care changes will always apply even if the agreement specifies its own requirements. For example, an agreement will end or may be suspended for a period if the payee under the agreement has less than 35% care. The date of effect will always be the date the change in care percentage applies in the assessment as determined by the Assessment Act, see Suspending or ending a Child Support agreement due to care.

After a care change decision has been made for a child who is covered by a child support agreement, the Agreements / Court Order team will manage all customer contact and any processing required to give effect to the impact of the care change on the agreement and the assessment.

If a care change decision has not yet been made, refer case back to the appropriate area. For example, to Mainstream / Integrated care if the care change is disputed). See Customer referral guidelines for Child Support staff.

The officer making the care change decision will follow the normal process for making and processing a care percentage decision. See Change in child support care levels from 1 July 2018 (15 May 2019 for WA Ex-nuptial cases).

Note: even if the care change does not affect the agreement rate, any changes to actual care levels must still be recorded on Cuba so that they are available the next time a provisional notional assessment (PNA) is generated, and the correct care percentages are used by Centrelink/FAO to calculate Family Tax Benefit (FTB) entitlements.

Once a care change decision has been made, contact both customers to discuss:

• the care change decision made
• the effect it may have on the agreement rate, and
• any evidence that is required and if so, the date which it is required

See Contact with Child Support customers

If the customers do not agree on the effect the care change will have on the agreement rate, check any previous contacts or discussions with the customers about the effect and limitations of any such clauses.

Note: discussions with the customers may be recorded in the Additional Registration Details window, Case notepad or in the individual customer’s communication.

If required obtain assistance from an SSO.

Considering all the available information, including any evidence provided by the parties. Can the care change clause can be activated or de-activated?

• Yes, go to step 13
• No, if the care change clause cannot be activated or there is no clause that covers the customer’s situation, advise the customers there will be no change to the agreement provisions. Explain other options such as:
• making a new agreement with the other party. See Agreements between Child Support customers
• how child support agreements can be ended. See Ending a Child Support agreement

If possible activate or de-activate the clause in the Clauses window.

Note: usually a care change clause cannot be recorded in the Clauses window. Manual adjustments may have to be made to the Periodic Amounts or Formula Modification window.

If required obtain assistance from an SSO.

Document the decision in the case notepad.

Go to Step 14.

An agreement may have a clause that allows the roles of payee and payer to swap when a child’s care changes. The role swap clause will be activated when the level of care (as specified in the agreement) is applied in the assessment. This could be when the payee ceases to be an eligible carer or when they have a care percentage below a certain level. Child support as specified by the agreement will then become payable to the other parent.

A role swap clause can only specify that it will apply if the payee has a care percentage at 65% or lower. For example, the agreement cannot provide that the roles will swap if the payee has a care percentage at or below 80% as this would mean the other parent could have 20% care and they would not be an eligible carer of the child.

If the payee ceases to be an eligible carer and a role swap clause is activated, the agreement will not be suspended or terminated, see Suspending or Ending a Child Support agreement due to care.

Due to the operation of the care date of effect rules, a role swap clause may not always be activated from the date of care change, for example:

• The clause will be activated on the date that the original payee has a care percentage below that specified in the agreement and the other parent is an eligible carer
• For any period when the other parent is not an eligible carer, the agreement rate will continue to be paid to the original payee if they are an eligible carer
• For any period when both the original payee and other parent are not eligible carers and a care suspension period applies, the relevant agreement rate is not payable by either parent

See Change in child support care levels from 1 July 2018 (15 May 2019 for WA Ex-nuptial cases) for more information.

When a role swap clause is recorded in Cuba and the clause is activated, an intray will route to the Agreements/Court Order team for action. This team will manage all customer contact and any manual processing associated with activating and administering a role swap clause, see Complex system processing for reverse child support cases.

Send a MSE1-6 Agreement Role Swap letter to the customers. See Letters Cuba Process Help. If multiple care changes are being processed at the same time, a manual UQ120.08 Role Swap letter may need to be sent.

An agreement may have a clause that states the agreement liability will cease to be payable for a child when the payee has a specified level of care. This could be when the payee ceases to be an eligible carer or when they have a care percentage below a certain level as set out in the agreement.

If the agreement clause states that the agreement will end when a specified level of care applies (and the payee is still an eligible carer), then end the agreement in Cuba for the child when the specified level of care applies in the assessment.

Note: if the payee is not an eligible carer on or after 1 July 2018 or 15 May 2019 for WA Ex-nuptial cases, the legislation requires that the agreement will end for the child or it will be suspended for a period. See Suspending or ending a Child Support agreement due to care.

If the agreement has a clause that it will end when the payee ceases to be an eligible carer, the option for requesting a longer agreement suspension period of up to 26 weeks will not be available for the customers as the agreement terms will take precedence.

If an agreement has a clause that it will be suspended for a longer period if the payee ceases to be an eligible carer but it specifies a suspension period of less than 26 weeks (for example 12 weeks), the agreement will be suspended for 26 weeks. However, if the agreement also includes a clause that it will end after the 12 week suspension period, end the agreement in Cuba from that date.

Check that the assessment has updated to the correct agreement rate or the correct assessment rate if the agreement has been ended or no longer has effect.

If the agreement rate has changed by more than 15% a new provisional notional assessment (PNA) will be issued by the system.

If no new PNA is issued, because the agreement rate has not changed by more than 15%, customers on limited agreements may request a new PNA if they want to. Generate a new PNA if a customer with a limited agreement requests a new PNA. See Notional assessment relating to child support agreements for further information.

If a PNA has issued while either customer has an estimate of income in place, the system will use this income when eligibility is run and the PNA is created. This is not correct as the PNA must be based on the adjusted taxable income for the last relevant year of income for the child support period. See Notional Assessments, Generating a PNA in Cuba for information on how to correct the PNA before it is sent to the customers.

Once a PNA has issued, customers may then apply (if they wish) to vary the PNA by estimating their income (or by requesting any of the other 4 types of possible PNA variations). See Notional Assessments, Varying a Provisional Notional Assessment.

When the PNA converts to a notional assessment the parents’ FTB Part A will be calculated on the amount of child support that would have been payable if the agreement was not in place. See Notional assessment relating to child support agreements.

Alternatively, if the effect of a clause is to suspend or end the agreement, so that the child support will now be based on the formula, the customer may be able to make an estimate of income. See Child support estimates (post 1 July 2010).

If a terminating event has occurred for a child, the assessment will be ended for that child. See Terminating Events (Stage 2) for what constitutes a terminating event. A change in care is not a terminating event if one of the parents is still an eligible carer after the care change.

If a terminating event has occurred for a child, the event may cause the agreement to cease to have effect, or may cause the agreement to be terminated.

If a terminating event has occurred for a child, the event may cause the agreement to cease to have effect, or may cause the agreement to terminate.

A terminating event affects different types of agreement provisions in different ways, depending on:

• the type of agreement provision
• whether the terminating event resulted from an election to end the assessment or any other terminating event; and
• whether the terms of the agreement refer to the terminating event

If a terminating event (other than an election to end the assessment) occurs, the following agreement provisions cease to have effect for an affected child:

• provisions that set or vary the periodic child support rate, and
• non periodic payment provisions that reduce the annual rate

If a successful application is later made for a new child support assessment the above provisions no longer apply and will not be applied to modify the assessment.

The following agreement provisions do not cease to have effect if a terminating event occurs:

• provisions for the payment of non-periodic child support that does not reduce the assessed liability, and
• lump sum payment provisions where a lump sum is credited against the child support liability

If a successful application is later made for a new child support assessment the above types of agreement provisions apply. The customer does not need to apply for the agreement to be used again in the new assessment.

Note: if a limited agreement has been applied to a re-started assessment, depending on the variation to the notional assessment amount or the age of the agreement, it may be possible to elect to end the limited agreement. See End limited agreements table in Ending a Child Support Agreement.

If an election to end the assessment has been accepted, the assessment for that child will end, generally this will not permanently end the child support agreement.

If the same customer that elected to end the assessment then makes a successful application for a new child support assessment, the agreement will re-start if it has not otherwise ended (for example, the agreement has expired). The agreement will modify the new assessment. The customer does not have to re-apply for the agreement to be accepted.

Review the agreement. Check when it was made and if it contains any provisions for ending the agreement if a terminating event occurs:

• If the agreement was made before 23 May 2018 or 15 May 2019 for a WA Ex-nuptial case, and the agreement states it will end if a terminating event occurs, then the agreement will end. The exception to this is where the agreement has a specific definition of terminating event for the purposes of the agreement that does not include the assessment ending due to an election to end the assessment
• If the agreement was made on or after 23 May 2018 or 15 May 2019 for WA Ex-nuptial case and the agreement states it will end if a terminating event occurs, this reference in the agreement is not taken to mean a terminating event resulting from an election to end the assessment. The agreement will therefore not end

Note: if a limited agreement has been applied to a re-started assessment, depending on the variation to the notional assessment amount or the age of the agreement, it may be possible to elect to end the limited agreement. See End limited agreements table in Ending a Child Support Agreement.