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I understand that the Child Support Agency is now required to use the care percentages and care periods that are used by the Family Assistance Office under the A New Tax System (Family Assistance) Act 1999.

Effective date. Can someone tell me when this alignment became effective (Royal Assent)?

The maths There is a conflict in the maths within the act. Let me explain!!!

The A New Tax System (Family Assistance) Act 1999 [FAAct], at Section 59 states:

"Shared care percentages where individual is FTB child of more than one person who are not members of the same couple
(1) An individual has a shared care percentage under this section for an FTB child of the individual if:
(a) the Secretary has determined the individuals percentage of care for the child during a care period; and
(b) that percentage is at least 35% and not more than 65%.
Note: Paragraph 27(2)(b) deals with the percentage of care in a blended family case."

The Family Assistance Guide [FAG] states:

"From 1 July 2008, new rounding rules for care percentage took effect. For care below 50%, care level must be rounded down to the nearest whole number. However, for care levels of 50% and above, care percentage must be rounded up to the nearest whole number."

The FAAct, at Section 35 states:

"Rounding of a percentage of care If an individuals percentage of care determined under this Subdivision is not a whole percentage:
(a) if the percentage is greater than 50%the percentage is rounded up to the nearest whole percentage; and
Part 3 Eligibility for family assistance Division 1 Eligibility for family tax benefit Section 35N 60 A New Tax System (Family Assistance) Act 1999
(b) if the percentage is less than 50%the percentage is rounded down to the nearest whole percentage."

The FAAct defines care percentages to 2 significant figures, eg. 35% or 50%. It does not define care percentages to 3 significant figures, eg. 35.0% or 50.0%. Remember your Year 11 maths and the correct use of significant figures in calculations, as displayed below:

Nights   3 sig figs   2 sig figs
125   34.2%   34%
126   34.5%   35%
127   34.8%   35%
128   35.1%   35%
129   35.3%   35%

So to 2 significant figures, 126 days is 35%, not 128 days as is commonly used by the FAO or CSA.

The error that the agencies are making is that they are performing calculations to 3 significant figures and then rounding (to the Payer's disadvantage) to significant figures. Instead of correctly calculating to 2 significant figures.

The additional section from the FAAct about rounding should be irrelevant if the correct calculations are performed.

So why have I made a big deal about mere two days????

Because a common parenting care arrangement is half school holidays and 3 weekends a month, which hits 126 days or 34% as per FAO and CSA maths. Which puts the Payer into Regular Care category and the subsequent loss of FTB and other benefits. The correct calculation should be 35% and Substantial Care.

That's the identification of the error. That's easy!!!!

More harder, what can I do about it?



A person who can't pay gets another person who can't pay to guarantee that he can pay. Like a person with two wooden legs getting another person with two wooden legs to guarantee that he has got two natural legs. It don't make either of them able to do a walking-match. Charles Dickens
PaulG,
         unfortunately legislation, both CS and FAA, states that care percentages below 50 per cent needs to be rounded down thus a 127 days will be rounded down to the 34%.  In my opinion this is clearly designed to maximize the child support liability and thus maximize the commensurate reduction in the FTB payments made. This reduction of the FTB is a common feature throughout the legislation. I believe, although I haven't re-checked, that the CS legislation is and was the same in this regard and has been since 2008.

The new legislation, which included amendments to both the FAA and CS acts, came into effect on 01/07/2010. I'm not sure when it obtained Royal Assent although I believe it was very close to the date that it came into effect.

Level of care at around both the 14% and 35% thresholds can have quite dire consequences where 1 day/night can make up to over $10,000 difference thus a theoretical annual rate of CS of getting close to $4 million consider the cost of one night. This is pretty ridiculous considering that part of the intent of the 2006-2008 changes was to reduce such thresholds; instead it introduced two very significant thresholds.

e.g. (1) Parent A has an adjusted taxable income of $200,000 and there are 3 over 13's and Parent B is on income support (i.e. an ATI less than the Self Support amount, although this isn't the only scenario that this leap applies to). At 52(14%) nights care for Parent A, the annual CS is $31758, whilst at 51(13%) nights the annual rate of CS jumps to $41787.

e.g. (2) Parent A has an adjusted taxable income of $20,000 and there are 3 over 13's and Parent B has an adjusted taxable income of $200,000. The when Parent A has 127 nights of care then the CS liability is $0, but when Parent A has 128 nights the CS liability jumps to $10359. Again this isn't the only scenario.
You do a great job MikeT....Many thanks

A person who can't pay gets another person who can't pay to guarantee that he can pay. Like a person with two wooden legs getting another person with two wooden legs to guarantee that he has got two natural legs. It don't make either of them able to do a walking-match. Charles Dickens
PaulG - There are many other differences between FAO and C$A and I encourage to leave C$A alone and always work with FAO on these matters.

For starters FOA will calculate your care percentage using an hours count for the year, or days or nights - whatever method accurately shows your care percentage will be used. They have always done this and now C$A has to do the same but this remains to be seen.

Also FAO has a lot of other legislation that is more reasonable than C$A, for example if there is a change of care over a small period of time FAO will generally not change anything where C$A will usually make changes if they can collect more $$$ off you.

The appeals process of the two agencies are still very different with the FAO being more reasonable.

The latest changes are interesting and are yet to be fully tested to see if they are good or not. Regardless the move to the FAO is a step in the right direction
Fairgo,
         thanks for that extra and very important advice.

PaulG,
        I fully agree with what Fairgo advises, although it should be noted that the CS legislation does allow calculation of the level of care by hours, it simply says "normally nights" or words to that effect, of course I believe the procedural instructions that the CSA distribute to the officers who enact and record the level of care, very likely do not allow for the legislation to be enacted as it was intended to be enacted and that is to meet the object of the act to ensure that parents (plural; not paying parent as the recent Ombudsman's report shows is the inherent misinterpretation of the legislation within the CSA) meet their(again this refers to the parents not just one parent) financial responsibility.

Child Support Assessment Act 1989 - Section 4 said
(1)   The principal object of this Act is to ensure that children receive a proper level of financial support from their parents.
Thanks MikeT,

The principle is great. I would love this to be the case. Is the Payee under an obligation to ensure the the financial support I provide is used for the benefit of the children. Has this principle been tested in court to ensure the act does not stop at the transaction between Payer and Payee, but also extends from Payee to children?

A person who can't pay gets another person who can't pay to guarantee that he can pay. Like a person with two wooden legs getting another person with two wooden legs to guarantee that he has got two natural legs. It don't make either of them able to do a walking-match. Charles Dickens
PaulG,
        I don't believe that is has been tested in court, nor do I believe it is likely to be tested, which is a great shame.
I might add that I have recently dealt with both agencies on this matter and C$A still came up with the different care percentage than FAO - off course C$A's care calculation was lower than FAO.

With C$A I had to go through Objection/SSAT process whist with FAO it was a lot less formal and much quicker (4 weeks instead of thee months just for the Objection process) so I ended up letting go of C$A after the Objection as the 1st of July came and laws changed allowing FAO to make the decision on C$A's behalf.

In my conversations with FAO they appear to have the higher position than C$A with them saying that C$A was aligned to them and C$A has to accept their new calculation.

I'm still waiting for C$A to acknowledge FAO's decision and send out paperwork etc… I think there will be a glitch somewhere with C$A so I am not holding my breath on this one.
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