Assessing capitalised maintenance income for Family Tax Benefit (FTB) 277-51110000

Customer advises they have received a one-off payment or asset worth more than $1,500 as either child support or spousal maintenance.

Lump sum FTB claims: for financial years 2008-09 to 2010-11, customers could give permission for Child Support data to be used rather than self-assessing their child support details. In this case, child support details do not need to be manually assessed or coded.

From 2011-12 onwards, all claims will be assessed using information from Child Support. Customers can no longer self-assess their child support. If the customer has provided details of capitalised maintenance income received during the relevant financial year, record the total amount received during the year.
Procedure ends here

FTB instalment customers

Is the capitalised maintenance income included in a child support agreement with a start date of 1 July 2008 or later and accepted by Child Support?

• Yes, no manual assessment or coding is required as assessment is automated per details transferred from Child Support.
  Procedure ends here
• No, go to Step 2

Has customer asked Child Support to collect child support payments from the same payer?

• Yes, go to Step 3
• No, go to Step 4

The customer needs to advise details to Child Support.

Child Support may treat it as a direct payment (often referred to as a non-agency payment) and will transfer details to Centrelink.

Alternatively, Child Support may talk to the customer about entering in to a child support agreement.

If Child Support treats it as a direct payment:

• against child support arrears, the full amount of the direct payment is assessed for FTB in the year in which it is received, as advised by Child Support
• towards future child support liability (only if the one off payment or value of the asset exceeds $1,500), it may be treated as capitalised maintenance income for FTB and assessed over a longer period. If part of the direct payment is credited against child support arrears it cannot be included as capitalised maintenance income (and is assessed for FTB in the year in which it was received), and the remainder must exceed $1,500 to be treated as capitalised maintenance income. The effect of the direct payment transferred to Centrelink will need to be manually adjusted by Child Support Unit staff on the Override Maintenance Income (MNOI) screen

Send details provided by the customer to Child Support Unit (CSU) using Fast Note - select Auto text, use Families > Updates > Capitalised Maintenance Income.

Procedure ends here.

Is the capitalised maintenance income part of the customer’s normal child support entitlement?

• Yes, no action is required as it is assumed that the customer will receive their full child support entitlement. Record details on a DOC. Procedure ends here
• No, if there is a court order or legal agreement (for example, property settlement which includes child support), documentation should be provided by the customer

Send details provided by the customer to Child Support Unit using Fast Note - select Auto text, use Families > Updates > Capitalised Maintenance Income.

Child Support Unit (CSU) Smart Centre Processing staff

• Only include amounts stated as being for child support or spousal maintenance
• To assess the value of an asset, use the amount given in the legal document or as advised by the customer. For help, see Non-cash maintenance income assessment for Family Tax Benefit (FTB)
• If the total CMI is not divided equally between each child, calculate separate CMI amounts for each child

Work out the capitalisation period

Unless this is stated in a court document, the capitalisation period starts from when the child support was received and ends on the date the child turns 18 (or in the case of spousal maintenance, the date the payee turns 65).

If CMI is received for more than 1 child, each child's capitalisation period ends on the day they turn 18.

Child Support Unit (CSU) Smart Centre Processing staff

Is the total CMI divided equally between children in the child support case?

CMI should not be recorded at both the group and child levels. If the CMI is child specific, it should be coded at child level for the relevant child/ren. See the Resources page for an example.

If current CMI details exist, they must be updated at either the group or child level depending on the screen on which they were initial coded. To check, ‘S’elect the entitlement group from the Mtce Ent'ment Grp Summary (MNGS) screen and go to the Capitalised Mtce Inc - Group (MNCG) screen. If the Action: field is GRP or GRRP, update details for the group.

• Yes, to record details for the group, go to Step 7
• No, to record details for each separately, go to Step 8

Child Support Unit (CSU) Smart Centre Processing staff

Record/update the following fields:

• CMI Start Date - the date the capitalised maintenance income was received. This may be up to 6 weeks in the future
• CMI End Date - end of capitalisation period
• CMI Amount $.cc for group

To correct details, code 'C' next to the incorrect line and enter the correct details.

To delete a line, code 'D' next to the line and confirm deletion.

Enter Source: and DOR: fields and press [Enter]

Record details on a DOC and finalise activity on Assessment Results (AR) screen.

Go to Step 9.

Child Support Unit (CSU) Smart Centre Processing staff

'S'elect the child/ren from the MNGS screen and go to the MNCM screen.

Record/update the following fields for the child:

• CMI Start Date - the date the capitalised maintenance income was received. This may be up to 6 weeks in the future. If the start date is changed for 1 child, all other children's start dates will automatically update to the new start date
• CMI End Date - end of capitalisation period for child. If left blank, the system will use the child’s 18th birthday
• CMI Amount $.cc for child

To correct details, code 'C' next to the incorrect line and enter the correct details.

To delete a line, code 'D' next to the line and confirm deletion.

Enter Source: and DOR: fields and press [Enter]

Record/update the MNCM screen for any other child in the child support case.

Record details on a DOC and finalise activity on Assessment Results (AR) screen.

Child Support Unit (CSU) Smart Centre Processing staff

The system calculates the annualised amount for each financial year in the capitalisation period using the following 2 step process:

• Amount attributed to financial year
• Total CMI x days in relevant period in the financial year / days in full capitalisation period
• Annualise amount for the financial year
• Amount attributed to financial year x number of days in financial year / number of days in capitalisation period in the financial year

See the Resources page for an example.

The MIT Capital Income for child (MNIC) screen displays capitalised maintenance. To access the MNIC screen you need first to access the MNIS screen.

Parents reconcile: If the payee and payer records are linked, the CMI amount will be automatically updated to nil from the start date of the relationship.