Retrospective child support assessments and Family Tax Benefit (FTB) 277-51130010

When Child Support advises Centrelink of a retrospective change in a child support assessment for an FTB customer, the information is treated differently depending on what period the change relates to.

From 1 July 2006 to 30 June 2011, it was assumed that the customer was collecting their new child support assessment amount from their date paid to plus one, and that they did not collect or repay child support in relation to the retrospective assessment.

A letter was sent to the customer asking them to advise Centrelink if they:

• Collected any owed child support arrears or repaid any child support
• If the customer advised they had received arrears or repaid child support in relation to the past period, the adjusted amount calculated by the system could be updated to reflect the amount received or paid so that the customer's maintenance income for the period was adjusted
• Wanted to request a review of their FTB entitlement (as a result of having to repay child support due to the backdated assessment)
• If the customer is required to repay child support due to a backdated reassessment, they may be able to receive arrears of FTB. For full arrears to be payable, the customer must request a review within the specified timeframe. The time limit for customers to request a review is the later of 13 weeks after they receive notification of the review by Child Support, or 52 weeks after the original decision was made

The reassessed child support assessment is applied from the later of the date of event (DOV) or 1 July 2011.

• If the customer is private collect, they are assumed to have collected the new assessment amount from the actual event date (or 1 July 2011, whichever is later)
• The customer's ongoing FTB Part A rate may be adjusted from the start of their next fortnightly payment (date paid to plus one) as the new child support assessment amount is used to estimate their annual maintenance income under the Entitlement Method from that date
• If a potential FTB overpayment is identified, the customer's ongoing FTB rate will be automatically adjusted for the remainder of the financial year to offset the potential overpayment under mandatory continuous adjustment
• If potential FTB arrears are identified as a result of a retrospective change in a Child Support assessment, the arrears will be deferred and included in the reconciliation result
• If the customer advises they did not collect the child support arrears, the non-paid arrears may be taken out of the FTB assessment so that the customer's maintenance income is adjusted
• If a customer is required to repay child support due to a backdated reassessment, the customer may be able to receive arrears of FTB. In order for full arrears to be payable, customers must request a review within the specified timeframe. The time limit for customers to request a review is the later of 13 weeks after the person receives notification of the review by Child Support, or 52 weeks after the original decision was made

The reassessed child support assessment is applied from the later of the date of event (DOV) or 1 July 2012:

• if the customer is private collect, they are assumed to have collected the new assessment amount from the actual event date (or 1 July 2012, whichever is later)
• the customer's ongoing FTB Part A rate may be adjusted from the start of their next fortnightly payment (date paid to plus one) as the new child support assessment amount is used to estimate their annual maintenance income under the Entitlement Method from that date
• if a potential FTB overpayment is identified, the customer's ongoing FTB rate will be automatically adjusted for the remainder of the financial year to offset the potential overpayment under mandatory continuous adjustment
• if potential FTB arrears are identified as a result of a retrospective change in a Child Support assessment, the arrears will be deferred and included in the reconciliation result
• if the customer advises they are unable to privately collect arrears owing to them as a result of a retrospective increase to the child support assessment, they should be advised to seek legal advice as the amount cannot be adjusted (unlike periods between 1 July 2011 and 30 June 2012)

If a private collect customer has already been reconciled for a financial year and a retrospective:

• decrease to their child support assessment is received, the customer may receive FTB arrears
• increase to their child support assessment is received, the customer may incur an FTB debt. Customers who incur an FTB debt as a result of an increased retrospective assessment can apply for a formal review of the FTB reconciliation debt with Centrelink. If the customer is unable to collect the arrears owed due to the retrospective assessment, it may be appropriate for the customer to seek legal advice about enforcing the unpaid child support arrears. If the customer provides a letter from their legal representative that advises they cannot assist, as it would not be cost effective to do so, refer the customer to a Social Worker to discuss a partial maintenance exemption for the relevant financial year
• if the customer wants to discuss or apply for a formal review of the retrospective change to their child support assessment, refer them to Child Support

If it is the first child support assessment, FTB Part A arrears may be issued as a result of the customer now satisfying the Maintenance Action Test (MAT) from the start date of the child support assessment. The maintenance income is not applied to the FTB arrears for periods before 1 July 2011.

The reassessed child support assessment is applied from the later of the date of event (DOV) or 1 July of the current income year:

• If the customer is private collect, they are assumed to have collected the new assessment amount from the actual event date (or 1 July of the current financial year, whichever is later)
• The customer's ongoing FTB Part A rate may be adjusted from the start of their next fortnightly payment (date paid to plus one) as the new child support assessment amount is used to estimate their annual maintenance income under the Entitlement Method from that date
• If a potential FTB overpayment is identified, the customer's ongoing FTB rate will be automatically adjusted for the remainder of the financial year to offset the potential overpayment under mandatory continuous adjustment
• If potential FTB arrears are identified as a result of a retrospective change in a Child Support assessment, the arrears will be deferred and included in the reconciliation result
• If the customer advises they are unable to privately collect arrears owing to them as a result of a retrospective increase to the child support assessment, they should be advised to seek legal advice as the amount cannot be adjusted (unlike periods between 1 July 2011 and 30 June 2012)

Child support arrears may be collected by Child Support and included in the disbursements notified electronically. Arrears of child support are assessable in the financial year they are received, not in the financial year for which they were due.

If child support is assessed using the Modified Entitlement Method, the amount assessed will be recalculated whenever Child Support advises new disbursement details or a change in the assessment amount. Annual maintenance income will be calculated using the Entitlement Method and the Disbursement Method and the method that results in the higher amount will be used to work out the customer's ongoing FTB Part A rate.

If a projected reconciliation overpayment is identified, the customer's ongoing FTB rate may be reduced to offset the potential overpayment under mandatory continuous adjustment.

Where a retrospective decrease in a child support assessment has occurred for a Child Support collect customer, Child Support may reduce the ongoing disbursements to recover the overpaid amount.

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.

If a customer contacts to advise the retrospective child support assessment information on their Centrelink record is incorrect or not present see Child Support data has not loaded onto or is incorrectly affecting customer's record for more details.