Child Support customers impacted by the Douglas decision 277-24061449

Item

Documentation templates

1

Income changes

Document the special circumstance decision for each income year in the Income window using the following template.

Subject:

Lower amended income applied - xxxx/xx

Notepad text:

The ATO have amended the income for this customer due to a Federal Court decision (Commissioner of Taxation v Douglas) handed down on 4 December 2020 which changed the tax treatment of invalidity benefits received by veterans under the Military Superannuation and Benefits Act 1991 and the Defence Force Retirement and Death Benefits Act 1973.

Section 56(2A)(c) of the Child Support (Assessment) Act 1989 allows Amended incomes to be applied retrospectively where the Registrar is satisfied special circumstances exist.

In this situation, we are satisfied special circumstances exist as the parent wasn’t aware of or in control of the changes as a result of the Douglas decision, so the income should be applied to the assessment retrospectively.

This action has been endorsed by Child Support Program Advice team and DSS as part of the Australian Government response to the Douglas decision.

Income Year: 20XX/XX

Original Taxable income: $XX

Amended Taxable applied to assessment: $XX

Period income applied to: XX/XX/XXXX – XX/XX/XXXX

The lodgement date of the Amended Taxable income has been amended to the Lodgement Date of the original taxable income.

[Service Officer Sign off]

2

Final outcome – no impact to assessment or incomes not used in assessment

Document the final outcome in the veteran’s Client Details window using the following template.

Subject:

Amended incomes applied to the assessment

Notepad text:

The ATO have amended the income for this customer due to a Federal Court decision (Commissioner of Taxation v Douglas) handed down on 4 December 2020 which changed the tax treatment of invalidity benefits received by veterans under the Military Superannuation and Benefits Act 1991 and the Defence Force Retirement and Death Benefits Act 1973.

A review of the customer’s income has been completed for the following income years:

20XX/XX

20XX/XX

20XX/XX

It has been determined that no impact to the child support assessment has occurred as a result of the amended taxable incomes for these years being applied to the assessment / as the incomes were never used in the assessment at any time

Customer contact has been completed, letters have issued / no letters have issued and no further action is required.

The issue is resolved

No further action is required

[Service officer Sign off]

3

Final outcome – AoG payment sought or debt reduction only

Document the final outcome in the veteran’s Client Details window using the following template.

Subject:

Amended incomes applied – AoG

Text:

An Act of Grace (AoG) payment has been sought for $XXX.XX.

The ATO have amended this customer’s incomes for the following years due to the Federal Court decision (Commissioner of Taxation v Douglas) handed down on 4 December 2020, which changed the tax treatment of invalidity benefits received by veterans under the Military Superannuation and Benefits Act 1991 and the Defence Force Retirement and Death Benefits Act 1973.

Income years affected:

XXXX/XX

XXXX/XX (estimate reconciliation – no change)

XXXX/XX

XXXX/XX

If any of the following apply, record the reason in brackets next to the relevant income year:

• Not applied due to FAR increase in liability
• Estimate reconciliation – no change
• Change of Assessment
• Agreement

When the incomes were received from the ATO, they were considered be late and lower than the previous taxable income, therefore Cuba did not automatically apply the incomes in accordance with s56 of the Child Support (Assessment) Act 1989 (CS Assessment Act).

Policy regarding the Douglas decision:

In accordance with the Australian Government response to the decision, a policy has been endorsed by Services Australia and the Department of Social Services (DSS) granting the Douglas decision a ‘special circumstance’ under section 56(2A)(c) of the CS Assessment Act, which allows the lower amended incomes to be applied retrospectively.

Include the relevant statement from the following 5 statements (delete the statements that do not apply):

1. (for CSA collect cases where veteran has overpaid)

According to this policy, the lower amended incomes for the years listed above have now been applied to the child support assessment. This has decreased the liability on case no XXXXXX by $XXX.XX, causing an overpayment of $XXX.XX to (insert RP name).

(Insert paying parents name) has elected not to recover the overpayment and an AoG payment has been sought for $XXX.XX. This amount will be paid directly to (insert PP name) once approved by the Department of Finance.

2. (for CSA collect cases where the other party has incurred a debt)

According to this policy, the lower amended incomes for the years listed above have now been applied to the child support assessment. This has increased the liability on case no XXXXXX by $XXX.XX, causing a debt of $XXX.XX to (insert PP name).

An AoG payment has been sought for $XXX.XX for the increased liability incurred as a result of Services Australia applying the lower amended incomes. This amount will be disbursed to (insert RP name) once approved by the Department of Finance.

3. (for Private collect cases where veteran has overpaid)

According to this policy, the lower amended incomes for the years listed above have now been applied to the child support assessment. Services Australia is satisfied the private arrangements were met prior to these changes and have calculated the difference in the assessment on case no XXXXXX to be $XXX.XX.

An AoG payment has been sought for $XXX.XX. This amount will be paid directly to (insert PP name) in full satisfaction of this (private collect) overpayment once approved by the Department of Finance.

4. (for Private collect cases where the other party has incurred a debt)

According to this policy, the lower amended incomes for the years listed above have now been applied to the child support assessment. Services Australia is satisfied the private arrangements were met prior to these changes and have calculated the difference in the assessment on case no XXXXXX to be $XXX.XX.

An AoG payment has been sought for $XXX.XX. This amount will be paid directly to (insert RP name) in full satisfaction of the increased (private collect) debt once approved by the Department of Finance.

5. (for CSA collect case where veteran debt has reduced (no AoG))

According to this policy, the lower amended incomes for the years listed above have now been applied to the child support assessment. This has decreased the liability on case no XXXXXX by $XXX.XX, causing a reduction to the existing debt owed. No overpayment has occurred. No Act of Grace payment is required. IMPORTANT NOTE – For this scenario remove all ‘AoG’ references from subject line and document template. Bank acc details not required.

Bank account details for payment:

BSB:

ACC:

Name:

This action is endorsed by the Child Support Program Advice team.

Awaiting Act of Grace payment to be finalised.

[Service officer Sign off]

4

Final outcome – Debt to other parent (agency collect)

Documented in both the veteran and other parent/s Client Details window using the following template.

Subject: Assessment updated – updated income information

Text:

Services Australia has applied updated income information for (insert veteran RP name) for the following years which has resulted in a change to the child support assessments and a debt of $XXX.XX owed by (insert PP).

Income years affected:

XXXX/XX

XXXX/XX

XXXX/XX

XXXX/XX

An AoG payment has been sought for $XXX.XX for increased liability incurred as a result of Services Australia applying updated income information for (insert RP name).

This amount will be paid directly to (insert PP name)’s child support account in satisfaction of this debt once approved by the Department of Finance.

This action is endorsed by the Child Support Program Advice team.

Awaiting Act of Grace payment to be finalised.

[Service Officer Sign off]

5

Finalisation document (veteran only) – AoG sought

Document on the veteran’s Client Details window after the Act of Grace payment has been sought and paid using the following template.

Subject: Douglas remediation finalised

Text: Refer to document in the Client Details window dated XX/XX/XXXX for full details of Douglas remediation.

The AoG has been paid and this matter is now finalised.

Special contact details and special recovery conditions have been removed.

Customer/s have been auto-unlocked

[Service Officer Sign off]

6

Finalisation document (veteran only) – Debt reduction only

Document on the customer’s Client Details window using the following template.

Subject: Douglas remediation finalised

Text: Refer to document in the Client Details window dated XX/XX/XXXX for full details of Douglas remediation.

This matter is now finalised – Debt reduction only, no Act of Grace payment was sought, as no overpayment occurred.

Special contact details and special recovery conditions have been removed.

[Service Officer Sign off]

CSRN

Department of Defence

Full Name

Full address including state and post code

Amount sought

$

Payment destination

Bank account or Child support account

Payment details

BSB:

ACC:

NAME:

Or

Customer payment reference number

Veteran role

Paying parent or Receiving parent

Recipient of AoG

Veteran (as the payer)

Other party (as the payer)

Veteran (as the payee)

Collection status

Services Australia collect

Private collect

Mixed collection

Item

Email template

1

No impact to the assessment

Subject: CRN XXX XXX XXXX Customer Name – Veteran impacted by Douglas decision – Finalised

Text:

Hi Centrelink,

This customer was affected by the Douglas decision.

Name:

CRN:

The following amended incomes were received for (Customer name) and applied to their child support assessment(s).

Year XX/XX

Original Taxable income $

Amended Taxable income $

Year XX/XX

Original Taxable income $

Amended Taxable income $

CSA have reviewed the child support assessments relating to case number xxxxxx and can confirm the assessments were not impacted and no changes have been made to any past assessment rates for periods affected by these amended incomes. This case is currently registered as private/agency collect.

No further action is required for child support purposes.

No act of grace payment has been requested – no further updates will be provided for this customer.

Signoff

2

Act of Grace payment requested / Overpayment removed / Debt reduction

Adjust text accordingly

Subject: CRN XXX XXX XXXX Customer Name – Veteran impacted by Douglas decision – Escalated for Act of Grace payment

Text:

Hi Centrelink,

Name:

CRN:

This customer was affected by the Douglas decision.

The following amended incomes were received for XXXXXX (Customer name) and applied to their child support assessment(s).

Year XX/XX

Original Taxable income $

Amended Taxable income $

Year XX/XX

Original Taxable income $

Amended Taxable income $

The following changes have occurred to case number xxxxxx as a result of these income updates:

From xx/xx/xxxx to xx/xx/xxxx annual rate changing from $XXXX to $XXXX

From xx/xx/xxxx to xx/xx/xxxx annual rate changing from $XXXX to $XXXX

From xx/xx/xxxx to xx/xx/xxxx annual rate changing from $XXXX to $XXXX

(Choose from the following 3 paragraphs – delete the paragraphs not required)

XXXXX (the veteran) is the receiving parent on case number xxxxxxx. This case is Agency/Private collect. The income updates have caused a child support debt payable by the paying parent (insert full name of other party, DOB, CRN) of $xxx.xx. An Act of Grace payment for $xxx.xx has been sought which will pay this debt for the paying parent and will disburse to the receiving parent (veteran) in approx. 8-12 weeks.

XXXXX (the veteran) is the paying parent on case number xxxxxx. This case is Agency/Private collect. The income updates have caused an overpayment from (veteran) to (full name of other party, DOB, CRN) of $XXXXX. Name (the veteran) has elected to not recover this overpayment. An Act of Grace payment for $XXXXX has also been sought which will pay this overpayment and will be paid directly to the veteran (no disbursement will occur). Payment will be received in approx. 8-12 weeks.

XXXXX (the veteran) is the paying parent on case number xxxxxx. This case is Agency/Private collect. The income updates have reduced the debt owed by (veteran) to (full name of other party, DOB, CRN) by $XXXXX. This change did not cause an overpayment. No act of grace payment has been sought. IMPORTANT NOTE – remove references in remaining parts of email to AoG.

Service Officer Signoff

Category

Details

• Employer name
• Prior Employer name

Department of Defence

-

• Reportable Fringe Benefits
• Prior Reportable Fringe benefits

-

10037

• SLS Untaxed Element [P]
• Prior Untaxed Element

22423

69216

• Total Tax Withheld
• Prior Total Tax Withheld

14534

14534

• Locked gross interest total
• Prior Locked gross interest total

-

4368

• Total Income or Loss
• Prior Total Income or Loss

30317

77110