Disbursement Method 277-51080060

The Disbursement Method is used to assess maintenance income collected via Child Support where:

• the customer has asked Centrelink to use the Disbursement Method, or
• under the Modified Entitlement Method comparison, the Disbursement Method results in a higher estimate than the Entitlement Method estimate

The Disbursement Method is based on the actual payments (disbursements) the customer receives through Child Support. Child Support advises details of disbursements electronically to Centrelink.

Each time a payment is disbursed to a customer annual maintenance income for the financial year is recalculated and may change the customer's ongoing FTB Part A rate. If the customer does not receive a disbursement in the month, a recalculation will occur using zero as the disbursed amount for that month.

When a child/case end is transferred by Child Support for a Child Support collect customer on the Disbursement method, the system retrospectively changes the case to Private Collect and applies the full maintenance entitlement amount.

This retrospective change in assessment results in the customer having their annualised maintenance income assessed under the Entitlement Method. In the majority of cases, this will result in a decrease in the customer’s ongoing rate of FTB Part A. This change in annualised maintenance income can also invoke Mandatory Continuous Adjustment, causing a further reduction to the customer’s ongoing rate of FTB.

Note: this is not caused by incorrectly entered/ended case data or a system problem, however it can lead to an unintended and unexpected reduction to the customer’s ongoing rate. Occurrences of this issue must be reported to the Level 2 Policy Helpdesk for escalation to the Policy (Advice) Assessment Team for a workaround to be considered. See the Resources page for a link.

The Disbursement Method should be discussed with Child Support collect customers if the customer advises they are not collecting their full child support entitlement. The pros and cons of changing assessment methods should be discussed with the customer.

Customers do not have to specifically ask for the Disbursement Method before it is discussed, it can be discussed as an option at any time. It should also be discussed with Private collect customers who advise they are unable to collect their full child support entitlement. These customers should be advised they can consider changing to Child Support collect, and if they do change to Child Support collect, the Disbursement Method is then available to them.

The Disbursement Method calculation is the sum of:

• all Child Support disbursements received so far in the financial year including direct payments, often referred to as a non-agency payment (NAP), plus
• the lower of:
• current month or the previous month disbursements (whichever is the higher amount) including normal, emergency and NAP x number of months left in the financial year, or
• one twelfth of current annual entitlement x number of months left in the financial year, plus
• non cash child support plus
• for previous private collection periods in the financial year, annual entitlement or actual amounts, apportioned for the period each applied plus
• capitalised maintenance

Details of the maintenance income assessment can be viewed from the MIT Explanation Summary (MNEX) screen.

Annual maintenance income is recalculated based on actual Child Support disbursements and NAPs, plus child support entitlement for any private collection period and any capitalised maintenance income.

Maintenance reconciliation may result in an adjustment to the customer's FTB Part A rate if annual maintenance income is different to maintenance income estimated during the financial year. Customers with a child support case registered for collection by the Child Support program may benefit from the Maintenance Income Credit during FTB reconciliation.