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Spring Act 2008

News Item said
The Spring Act 2008 FaHCSIA Legislation Amendment (Further 2008 Budget and Other Measures) Act (CS aspects only)

This act includes changes for various legislation and has been assented to, however this item is in regard purely to the changes that affect the Child Support legislation.

It is understood that CSA staff have or are due to attend training, which is for around 1 hour. It is unclear exactly when the changes will be used it is either January 6th or 8th 2009.

Overview of the changes

Changes have been made to the legislation regarding; Western Australia Ex-Nuptial Cases, the Level of Care, Reducing the Minimum Assessment to nil, Change of Assesment Reason 6, Prescribed Non-Agency payments and Other changes. It is believed that the changes

Western Australia Ex-Nuptial Cases

Basically it appears that the change is that there is no change other than the changes made in the Spring Act will not apply until the WA parliament adopts the changes.

Level of Care

This change removes the restriction that a level of care change must be 7.1% or more except in the case of when such a change would move in or out of the 14% threshold.

That is a change in the level of care of less than 7.1% can now be recognised where the change is the result of a court order an oral agreement or a parenting plan. It appears that the 7.1% rule may apply if the level of care change is due to actual care.

The changed legislation also reduces restrictions in regard to notification of level of care changes. The previous legislation could only apply the change from the date of notification, the new legislation introduces a 28 day notification period, bringing it inline with the notification period for a relevant dependant child.

The new legislation also allows an extension, where the registrar is satisfied that there are special circumstances, of the 6 month Interim Care Determination review period.

There is also legislative clarification of how the Child Support Program will treat a change in the percentage of care where a parent ceases to provide 35% care of a child, bringing it in line with the single case concept.

Reducing the Minimum Annual Rate to Nil

Due to anomalies that can be introduced with a fixed period of 12 months, the new legislation now allows a parent to nominate either the whole or part of a child support period to be reduced to nil.

Change of Assessment Reason 6 (High costs of child care)

The new legislation removes the restriction that a parent must have at least 65% care to apply under this reason. This allows both parents to apply. The assumption could well be that that if one parent applies (or has applied) and was successful, that if the other parent has care then they may also be able to have grounds for a reason 6 change of assessment. Effectively it could lead to a fairer distribution of the costs of such special care.

Warning - Please refer to corrections in subsequent posts below

However a care level of at least 25% is required.

Perhaps the SPCA will still consider that this is unfair and not in line with the 14% level of care at which parents are considered to be contributing to the cost of care.

Prescribed Non-Agency Payments

This amendment clarifies the treatment of a prescribed non-agency payment based upon the circumstances that were present. It means that a payment made whilst a parent had at least regular care (14% or over) or where part of the ongoing liability is met by a lump sum payment, the non-agency payment will not be credited.

Other changes

Departure Prohibition Orders

This amendment corrects the inadvertent removal of the CSA's ability to issue a DPO.

Please Note

DPO's affected were only for those with Overseas Maintenance Liabilities - Not in general

Publishing SSAT Decisions

This amendment will remove the secrecy provision preventing the SSAT decisions from being reported to the FaHCSIA secretary and may result in the publication of decisions.

Acceptance of agreements entered into during the Change of Assessment Process

This amendment is a correction and enables a SCO to consider the acceptance of a limited agreement for an amount that is less then the current formula.

Agreements entered into during the Change of Assessment process - court can set aside.

This amendment ensures that the court can set aside an agreement.

Acceptance of agreements entered into during the Change of Assessment process - provisional notional assessment

This amendment ensures that where an agreement is accepted during the change of assessment process, the original change of assessment application becomes an application for a change of assessment determination in relation to the resulting provisional notional assessment.

The amendments (not the changed legislation), including the non CS changes, can be found here Legislation Amendments

The PDF and Word versions are here :-

Attachment
Download: 143-2008(2).doc (223 Kb, 4 downloads so far)
Attachment
Download: Families, Housing, Community Services.pdf (100 Kb, 5 downloads so far)
 In addition to including the above amendments, I've also created two documents, one for the Child Support Assessment Act and the other for the Child Support Registration and Collection act. Due to upload limits I've only been able to include the first (the amended Child Support Assessment Act). The second (the amended Registration and Collection Act) will follow.

Inclusions are highlighted in red, repealed sections and omissions are highlighted by double strike through.

Attachment

Last edit: by MikeT

The changes will be applied as from January 6th 2009 (according to the CSA's eNews).
MikeT said
Change of Assessment Reason 6 (High costs of child care)

The new legislation removes the restriction that a parent must have at least 65% care to apply under this reason. This allows both parents to apply. The assumption could well be that that if one parent applies (or has applied) and was successful, that if the other parent has care then they may also be able to have grounds for a reason 6 change of assessment. Effectively it could lead to a fairer distribution of the costs of such special care. However a care level of at least 25% is required.

Perhaps the SPCA will still consider that this is unfair and not in line with the 14% level of care at which parents are considered to be contributing to the cost of care.
We have made enquiries at the department and the department suggests the idea is that the non parent carer needs to demonstrate that they are incurring some costs for child care, and that those costs arent insignificant.  So the 25% threshold represents what they think is a reasonable initial threshold amount to then have the individual circumstances of the case examined more closely by the Senior Case Officer making the COA decision.

MikeT this is in fact related to the amount of costs claimed as opposed to the care threshold. It could have been made a bit clearer but the explanation is sound.

The 25% is designed as an initial test to exclude those non parent carers with low child care costs. The normal child support formula already factors in small amounts of child care costs so it would be unfair to not exclude them in this way.

Also a more rounded response is…

Parents who feel that the child support formula should be varied because of special circumstances can apply to the CSA for a Change of Assessment (COA).  A Senior Case Officer (SCO) will consider the circumstances of both parents and make a decision. There are ten reasons that can form the basis of a departure from the formula.  

Under the old legislation, reason six stated that a payee can apply for a COA if their costs of maintaining a child aged under 12 years are significantly affected by high child care costs for the child. This reason was not amended as part of the child support reforms and was out of date because it did not reflect the income shares approach used in the new child support formula.  The income shares approach treats the income of both parents in the same way for the purposes of the assessment.

The amendment ensures that both payers and payees are able to have high child care costs factored into their child support assessment.  The parent needs to demonstrate to the SCO that they have high child care costs and their circumstances are sufficiently special to warrant a departure from the formula.  The SCO would need to be satisfied that it was just and equitable to depart from the formula.  

The amendments enable a non parent carer to apply to have a departure from the formula on these grounds. Where a non parent carer is eligible to receive child support for a child in their care the child support assessment is worked out based on the parents incomes. The income of the non parent carer is not relevant for this calculation because the child support system is premised on the principle that it is the parents f a child that are primarily responsible for the financial support of the child.

Because a non-parent carers income is not counted for the purposes of the child support formula another method of assessing whether or not child care costs are high is required. The amendments allows for a non-parent carer to apply to have high child care costs recognised if they are equivalent to 25 per cent of the costs of the child in the relevant period. This means that if the costs for a child for a period were assessed to be $1000 then in order to apply to have high child care costs taken into account the parent would need to establish that their child care costs were greater than $250.

Executive Secretary - Shared Parenting Council of Australia
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Secretary_SPCA  :$ In fact rereading it, the 25% is only related to Non-parent carers and is 25% of the cost of the child, as per the formula. It is set as a test as the Non-parent carers income cannot be used as.

Hopefully, here's the before and after Registration and Collections Act as promised :-

Attachment

Last edit: by MikeT

Another correction, well elaboration. That is that the DPO's that couldn't be issued were only for those with overseas maintenance liabilities not in general as the original post implies.
It is still very confusing as I received from FLRA a briefing paper "Draft talking points for: Top level TP's highlighting major changes to CSA in 2009 and it clearly states in there as a dot point …"that both paying and receiving parents, and non-parent carers, can now apply to have high child care costs for children under 12 considered for a change to their child support assessment;

Also the paper says

   2009 will see the bedding down of the Child Support Scheme Reforms as parents settle in to the new, more balanced child support scheme introduced in July 2008.

   From 1 July 2009 child support legislation will recognise new parentage laws for same-sex couples. Where same-sex couples have children together and then separate, they may be able to apply for child support.

   From 6 January 2009 legislation changes that affect child support will come into force.

The changes address some minor matters that have arisen with the new child support scheme. They include:

o   the ability to reflect a change in care of less than 7.1% (equivalent to one night per fortnight) in child support assessments, where there is a new agreement, parenting plan or court order;
o   the ability to backdate a change of care in assessments to the date the change occurred,  provided the CSA is told about the change within 28 days of it occurring; and
o   that both paying and receiving parents, and non-parent carers, can now apply to have high child care costs for children under 12 considered for a change to their child support assessment; and
o   Changes to the way that decisions to reduce a minimum assessment to nil are made.

It then refers readers to the CSA web site but no specific URL's. If we do not fully understand the rules does anyone else?

Executive Secretary - Shared Parenting Council of Australia
 Was my post helpful? If so, please let others know about the FamilyLawWebGuide whenever you see the opportunity
 
Secretary_SPCA,
                       with regard to Change of Assessment Reason 6, two things have been changed.

     First that it now applies to all parents/carers, before it was only if the carer had 65% or more care. i.e. there is no level of care test anymore.

The second change is a consequence of the ruling that for a parent the cost must be more than 5% of their adjusted taxable income before they can claim reason 6.

This ruling cannot be applied to a non-parent carer as a non-parent carer's income is not considered when doing an assessment and thus no ATI exists. Therefore instead of the 5% of the ATI, the rule is that the costs being claimed have to be at least 25% of the "cost of the child" (this value being calculated during application of the formula).

The cost of the child is determined by adding (after subtracting the following values; the Self Support amount, Relevant Dependent Child Amount and the Multi-Case Allowance) the Adjusted Taxable Income's of both parents and then applying that figure to the respective row in the cost of children table and then diving that amount by the number of children.

The Advanced Calculator, if the Show Calculations box is selected, shows the cost of each child.

I hope this clarifies this point.
Here's a more detailed description of the Spring Changes :-


CSA said
Spring 2008 Changes in Greater Detail

Changes of Care

Currently the Registrar can only make a change to a parent or non-parent carers percentage of care (s75) of a child when:
1.    The change to the care percentage is greater than 7.1 % (one night per fortnight) AND the care change affects the annual rate of child support payable (there is a change in the cost percentage); OR
2.    The care has fallen below or increased to above 14% (the reason being that the cost percentage will go from 0% to 24% or the other way around)

In all other circumstances, the percentage of care used in the assessment will remain unchanged regardless of the actual care being provided.

From 1 July 2008 the Child Support Agency has not been able to change a care percentage being used in an assessment unless the change in care met one of the above rules. This restriction was designed to limit the opportunity for parents to have disputes about levels of care, where the care changes are relatively small.
However, this legislation means that where our customers go to the effort of obtaining a court order, making parenting plans, written agreement or an oral agreement for care and the change does not meet the 7.,1 % criteria the change cannot be recognised. This is at odds with our Customer Service Principles and encouraging customers to sort out their own care arrangements.
To address this, the amendments will allow the Child Support Program to recognise care changes of less than 7.1% where the change is the result of a court order, oral agreement, written agreement or parenting plan.

Change of Assessment Reason 6

Before the pre Spring Act amendments a receiving parent could apply under change of assessment reason 6 where they believe that the costs of maintaining the child are significantly affected because of high child care costs in relation to the child. The applicant must have (or have had) at least 65% care of the child and this restricted the application to receiving parents only.
Amendments to the legislation will allow this ground of departure to apply to either parent. This ensures that both parents' incomes are being treated the same way reflecting the income shares approach of the formula.

Non-parent carers may also seek departure on the basis of high child care costs. As a non-parent carers income is not used in making the assessment, a new test specific to non-parent carers has been created. For non parent carers, the costs of child care will be considered high where the cost of the child care is a least 25% of the costs of the child.

As a result of this change it may be possible for a paying parent's liability to be increased or decreased as a result of high child care costs. Senior Case Officers (SCO) must make a decision to determine if this departure is just and equitable and otherwise proper to do so.

Reducing the Minimum Annual Rate to Nil

In circumstances where a parent is paying the minimum annual rate under section 66 of the Assessment Act, section 66A allows the Registrar to reduce an assessment to nil provided certain requirements are satisfied. Currently, for the Child Support Program to accept a customer's application to reduce the minimum annual rate to nil, the parent's income for the 12 month period (starting on the day the parent applied), must be less than:

The total number of the parents child support cases multiplied by the minimum annual rate of child support for the child support period.

Or

Total no of cases x MAR for the CSP

Example: Fred has an annual income of $15,000.00. Fred has three child support cases in which he is assessed to pay the minimum rate. He submit's an application to reduce the minimum annual rate to nil in all cases. To accept the application, Fred's income must be less than: 3 x $339.00 (CSP commenced in 2008) _ $1,017.00. As Fred's income is not less than $1107.00 the Registrar cannot accept Fred's application to reduce the minimum assessment to nil.

This means that the parent may be providing income information for a different period to the period for which they are asking for the Minimum Annual Rate not to apply. This could lead to anomalous results. Amendments to 66A will mean that instead of the Registrar considering a parent's income for a 12 month period, a parent may nominate either the whole, or a part, of a child support period to be reduced to nil.

The following will need to be considered:

    There is a minimum nomination period of two months.
    The applicant will need to provide income details for the period for which the person is applying.
    The person will need to demonstrate that their annualised income for the nominated period is lower than the total number of the parents child support cases multiplied by the minimum annual rate of child support for the child support period, for the nominated period.

Prescribed Non-Agency Payments

Some payments made by parents to third parties for the benefit of the children may be considered as a child support payment. A prescribed Non-Agency Payment is a payment (specified by the regulations) made to a third party such as a doctor, dentist, or a payment made for school fees.

Recent changes resulting from the 1 July 2008 Scheme Reforms limit the crediting of a prescribed non-agency payment when a parent has at least regular care of any children of the assessment or when child support payments are being met by a binding lump sum agreement. However, these changes did not adequately clarify how requests for crediting of these prescribed non-agency payments should be refused. Ambiguity in this section had the potential to cause confusion and conflict for parents.

Until now, CSA has refused to credit these payments under s71 D which is not ideal. The Spring Act makes amendments to refuse to credit these payments under section 71 C.
These legislative amendments will clarify the treatment of a prescribed non-agency payment based on the circumstances that were present at the time the payment was made. This will mean that a payment made whilst a parent had at least regular care or where all or part of the ongoing liability is being met by a lump sum payment will not satisfy the requirements for a prescribed non-agency payment and will not be credited.

Other Changes

Other changes include the following:

Departure Prohibition Orders

Changes to the legislation undertaken during the child support scheme reforms process inadvertently removed the Child Support Programs ability to issue a DPO on a paying parent with overseas maintenance liabilities. This has been rectified in the Families, Housing, Community Services and Indigenous Affairs and Other Legislation Amendment (Further 2008 Budget and Other Measure) Act 2008 changes.

Publishing SSAT Decisions


The secrecy provisions will be amended to provide that the SSAT will not be prevented from communicating the reasons for its decision to the Secretary, to a person authorised by the Secretary. Similarly, the Secretary will not be prevented form communicating the reasons for a decision to a person authorised to undertake a publication.
The Secretary is likely to authorise the publication of SSAT child support decisions by particular bodies, such as universities, which already undertake publication and analysis of Tribunal decisions in other related fields, including social security and family assistance, or other interested legal publishers.

Acceptance of Agreements entered into during the COA process

The Scheme Reform changes relating to agreements were not properly reflected in the existing provisions relating to entering into an agreement during the COA process. These changes enable a SCO to consider the acceptance of a limited agreement for an amount that is less than the current formula after consideration of the particular circumstances of the case.

Agreements entered into during the COA process - court can set aside

This change ensures that an agreement accepted during the COA process can be set aside by a court under section 136 in the same way as another agreement.

Acceptance of agreements entered into during the COA process - provisional notional assessment.

This change ensures that where an agreement is accepted during the COA process, the original COA application becomes an application for a COA determination in relation to the resulting provisional notional assessment. IMPORTANT REMINDER: the above changes do not apply to WA ExNuptial customers. These customers will still operate under the 1 July 2008 legislation.
With regard and to and to clarify Reason 6 even further, and thanks for the person who pointed this out as something that some might find confusing, the cost of child care is for professional child care (e.g. A Day Care Centre) as opposed to the costs borne by a parent or non-parent carer who the child "lives with" or "spends time with".

Here's what the person who pointed this out said :-

This section is not about the costs to parents of caring for their child themselves.  Apart from anything else, the 5% of adjusted taxable income rule would mean every parent has high costs.

This is not about child custody costs. This COA reason is about high costs for paid/professional child care - creche/family day care/after school care/school holiday care etc.
MikeT There has been some solid private feedback on this post confirming all is well and that the subject is well clarified now so many thanks for your assistance in outlining the detail here.

Executive Secretary - Shared Parenting Council of Australia
 Was my post helpful? If so, please let others know about the FamilyLawWebGuide whenever you see the opportunity
 
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