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Hello,
I found this site so helpful during my COA application that I am here againg seeking your valued advice. About 12 months ago I was contacted by the CSA to advise that they had reconcilled my account and that as a result I had approximatly $5,000 owing in arrears. These outstanding amounts dated back to 1999. I became very agitated as I have always submitted my tax returns in a timly manner have never missed a child support payment. The officer that I spoke to agreed for me to pay the arrears off at a rate of $50.00 per month which I agreed to and have been paying for over 12 months. I have recently learned that my ex is in the process of disputing the arrangements that I currently have in place with the CSA to pay off the outstanding arrears. Can someone please advice me on this process and if an objection will have the ability to change my current arranagements with the CSA. Many thanks
It's not really up to the other parent, not that you can stop them talking to the CSA. Unless your financial circumstances have changed then I believe that you should have grounds for complaint under the Financial Management and Accountability Act 1997. Not that I'm aware of what this act says. However, the CSA guide (5.2.1) implies that this act has some relevance to you be able to make a payment agreement with the CSA. Which you have done. Here's that section of the CSA Guide, which I see as being driven by some need to allow/accept negotiated agreement (it's unlikely that the CSA would, in my opinion, if they didn't need to). :-


CSA Guide - 5.2.1: Arrangements for payment said
5.2.1: Arrangements for payment

Version 2.2, Last updated 8 December 2010 11:52am

Context

CSA can make arrangements with a person who owes a debt to CSA to pay the debt in full, or by instalments. CSA will consider the circumstances of the particular case when coming to an arrangement for payment by instalments.

Legislative references

Financial Management and Accountability Act 1997

Instrument of Financial Delegation 20 July 2010

Explanation

The Secretary of the Department of Human Services has issued Chief Executive Financial Management and Accountability Delegations (CEDs) under the Financial Management and Accountability Act 1997. The CEDs provide the delegation to certain officers within the CSA to arrange for a debtor to pay a debt by instalments.

Arriving at a negotiated payment arrangement can be a useful first step in the enforcement process. It is often a more efficient way to assist a customer to meet their child support obligations than other methods of administrative enforcement.

The nature of an arrangement will differ depending on the circumstances of the case. In making a payment arrangement CSA will keep in mind:

    * the amount outstanding,
    * the time it will take to repay the debt,
    * the need to have the debt paid in the shortest possible time,
    * the debtor's ability to pay the debt in a lump sum,
    * whether it would be more effective and quicker for the debtor to borrow and/or sell assets in order to pay the debt,
    * the effect of the arrears on the child(ren) who would benefit from payment,
    * the protected earnings amount (if a payer is employed), and
    * the need to ensure that any amount deducted is not so high that a payer sees it as more attractive to leave that employment (if a payer is employed).

An arrangement may include the following features:

    * an agreement to pay the debt off in regular instalments,
    * an agreement on the date the debt will be satisfied in full,
    * an acknowledgment that if the customer's circumstances change, either the debt will be repaid in full or another repayment arrangement will be entered into to repay the debt more quickly,
    * an acknowledgment that if a tax refund becomes available during the period of the arrangement, it may be applied to the debt,
    * an acknowledgment that any failure to comply with the arrangement without reasonable excuse will mean that the debt is repayable in full at that time.

CSA can periodically review a payment arrangement to ensure it still reflects the debtors current financial circumstances. Arrangements can also be reviewed at any time if new information about the debtors capacity to pay becomes available or if their circumstances change.

A periodic payment arrangement does not prevent CSA from using other collection methods if they become available. This could include taking enforcement action if CSA receives information about a customer's financial circumstances that indicates the arrangement is no longer appropriate.

Here's a link to the guide The CSA Guide - 5.2.1: Payment Arrangements

Perhaps agree to increase the payments in-line with the percentage that your salary has increased less the percentage at which the CPI has increased which would be indicative of your financial situation.
miner - If you have negotiated a payment plan with C$A and you have kept up with payments then I can't see why they would change anything.

At the time of the review you could have appealed C$A's decision to a court under s110 of the Child Support Act as the period the decision applied was later than 18 months.

As you have accepted the decision for 12 months or so there is little avenue here unless the C$A advises the ex to recover the outstanding amount through the court by filing an enforcement order which would give you the opportunity to fight it.
Thank you very much MikeT and Fairgo - your information has made the situation clearer for me. 
Well it seems that CSA obvioulsy did not calculate the correct amount of Child Support in the first instance which has now caused you to suffer financially. To me that would be poor administartion on CSA's part.  

The following link is to the CSA's Guide

6.11.1: Compensation

Using the Child Support Guide | Child Support Guide

It is interesting reading and if everyone submitted claims for Compensation for Defective Administration etc, (which is reportable annually) CSA would come under more scrutiny and changes would eventually occurr
I am not sure how the above got to the statement that "CSA obvioulsy did not calculate the correct amount of Child Support in the first instance which has now caused you to suffer financially" and you should claim compensation from what you wrote in your post.  You could try but I doubt you would have any success.  The have been adminstratively negligent but I doubt there are grounds for compensation.

Now to answer your question, no, the other parent can't dictate how much is agreed on to pay off the arrears and I don't see what objection rights they would have. The amount the CSA employee set with you would of used different rules than what are normally used due to the delay in doing this work and used a smaller amount than normal.

Now back to the reason it caused arrears in the first place and your rights. You did an estimate, got it wrong, now you have arrears, that was the end result. But you could of challenged the information when they first contacted you.

First up they can do this, it was legislated in parliment, they can go back and reconcile every estimate that was dated 1/7/99 onwards, they have no limitations imposed on the length of tme unless they go back further than the set date.

You could object to this but you would need to object with a reason that would give you a chance of having the objection upheld.  Just saying the length of time won't get you the desired result.

However if the CSA contacted me and wanted to discuss an estimate that fell between 1999 and 2004 I would ask them to send me this information in the mail.

The letter will show the employers you were at and the dates and amounts earned.  CSA get this information from the ATO.  The ATO has limitations to the amount of time it can go back and ask for information from the customer. If it is longer than this they can't use the information in regards to any recalculation as you the customer can not confirm this information.

In short, CSA has the right to go back to this date but you can dispute the information they are using citing the limitations on the ATO information being used.

There is also a much easier way to have the information changed by the CSA employee there and then on the phone if you understand how the income is used and what they mean by 'inside' and 'outside' periods of the estimate.  Always get the information sent out, read the dates the estimate was used, it probably didn't run for the whole financial year and you may be able to them that alot of the income was earned after the estimate had finished and they were using your taxable income again.







Bobv said
I am not sure how the above got to the statement that "CSA obvioulsy did not calculate the correct amount of Child Support in the first instance which has now caused you to suffer financially" and you should claim compensation from what you wrote in your post.  You could try but I doubt you would have any success.  The have been adminstratively negligent but I doubt there are grounds for compensation.

There is a scheme called "Compensation for Detriment caused by Defective Adminstration". It's acronym is CDDA. The guidelines for decision making are produced by the Department of Finance and Deregulation. The CSA has compensations officers they then process the claim according to the CDDA guidelines. If there is defective administration and there is a detriment (quantifiable financial loss), due to a personal injury including mental injury, an economic loss or a loss due to property damage then you can obtain compensation.

Due to the what I consider atrocious blunders and especially the bias the CSA applies against the liable parent and that such blunders very often favour the recipient I believe any person with a reasonable objection should, even if not enduring a financial loss, should apply for compensation. Unfortunately with the CSA's unwillingness to put in processes that ensure that the legislation is administered according to the very object of the legislation one of the ways to try to introduce changes is to use every available avenue to enforce progress. Enough matters going to CDDA will likely be a statistic that may lead to progress.

I recently requested that issues be forwarded to the compensations officer as a claim for compensation. I had no expectation that compensation would ensue, but I do now have written evidence of 3 counts of defective administration. Two failures to act on information provided and one of incorrectly processing an application. Sheesh an basically that's from a very simple run of the mill matter.

Oh by the way, those awaiting CDDA. This matter took a little over 3 months. Hey, they even used express post to send the results/findings.

P.S. You appear to be quite knowledgeable with CSA matters. I welcome you and hope you continue to provide advice.  
Hi Mike,  what I meant was IsntLifeGrand said in his post that CSA obviously did not calculate the correct amount of Child Support.

I can't see where he got this from, the original poster did not provide anything in his post to that affect.  I agree that CSA has been adminstratively inept but unless the original poster challenged the information they used it can't be said they were wrong.  I suspect they were but unless you challenge them you can't just say they were wrong.

I have had to deal with them for 14+ years now and I have lodged many estimates like the original poster and have never had to pay any extra child suport, even when they have initialy told me I am required to do so.  I have tried to learn their rules and use them to my benefit whenever possible.  

I pay my child support payments, I don't agree with them but I pay them, but I make sure I don't pay more if CSA makes an error. I don't get mad, I find out my rights and I pursue them.

I will post and help out anyone I can if I have come across the same situations.

Thanks for the welcome

Bob
I did not question the arrears intially partly because my income is made up of a base wage and commission. The commission component of my wage varies form year to year hence, I took there findings as being correct. I did not know my rights or the rules in relation to such matters so I eneterd into a payment arrangement that I could afford. I have learened a lot since I found this site and would recommend anyone dealing with the CSA to post on this site to seek information so they can challanege the CSA if they belive they are being treadted inequitably. Thank you to everyone who has offered their views on this question and the other questions that I have posted. 
Hi BobV,

to answer your question.

Bobv said
I am not sure how the above got to the statement that "CSA obvioulsy did not calculate the correct amount of Child Support in the first instance which has now caused you to suffer financially" and you should claim compensation from what you wrote in your post.  You could try but I doubt you would have any success.  The have been adminstratively negligent but I doubt there are grounds for compensation.

miner said
I have always submitted my tax returns in a timly manner have never missed a child support payment.

one would assume that the CSA had all the information to make an accurate assessment.

from that information assessments were made, miner paid the amount of those assessments and never missed a payment,
an audit was completed and it was found that there is now arrears owing so the only conclusion I could make was that the original assessments were incorrect (defective).  

It is quite obvious that CSA had the all the information at one time or another to amend the assessment/s but did not do so.  To me that would be classed as defective administaration.




There are other posts on here addressing what happened last year or so - apparently C$A had a rather large back log of estimates that required reconciliation and the minister at the time instructed them to clear it. The result was a lot of people were posting on here about it. I don't think this would qualify for the CDDA scheme as they were just behind in their processes and the administration was not necessarily defective.
Fairgo said
apparently C$A had a rather large back log of estimates that required reconciliation and the minister at the time instructed them to clear it. The result was a lot of people were posting on here about it.

Regardless whether there was a backlog of estimates that required reconciliation or not, if the original estimates were INCORRECT through no fault of the payer and it has been found out either now, previously or in the future and it has caused anyone to owe money, the administration in the FIRST instance was defective….

for instance…

in 1999 a CSA worker says $2 + $2 = $3, in 2011 another CSA worker tasked with reconciling the account discovers the 1999 error and now says $2 + $2 = $4 (which is correct by the way) and then informs the payer because the original CSA worker made an error you now owe $1..The payer is disadvantaged NOW by owing $1 because of the original error "defective administration…"  The error should not have happened in the first place.

ILG

ILG said
previously or in the future and it has caused anyone to owe money, the administration in the FIRST instance was defective….

The loss of money isn't a factor in determining defective administration but is a subsequent step in the process of determining detriment. Personally I would persuade any person to try to claim compensation (i.e. make up an amount such as cost of time and effort to make complaint/objection) and let the CDDA tell you that there was defective admin but no detriment at least this is then held on file somewhere as an act of defective administration rather than the CSA likely ticking this off and reporting it as an act of sound administration which would likely be the case if one it isn't followed though with CDDA.
No you still can't assume they had the correct information about miners wages just because tax returns were lodged, the staff use the tax return as a guide but it can't tell them when the income was earnt, just how much.

If you work for say adecco or manpower they will just send the ato a group certificate for the full financial year and you may only have worked their for a couple of weeks or months, the CSA needs to talk to you to work out the dates, you can then make this work to your advantage.

If miner had known the information he does now he could of argued when he received his commissions and could of ended up with less or no debt, unfortunately for him he didn't know the system and the staff member he spoke to didn't talk him through it.

"from that information assessments were made, miner paid the amount of those assessments and never missed a payment,
an audit was completed and it was found that there is now arrears owing so the only conclusion I could make was that the original assessments were incorrect (defective)".  

The above statement is incorrect.  Miner would of paid his assessments correctly when CSA were going off his tax returns, when they were using his estimate to assess his income it was found to be incorrect for the period it was in use and that's why the debt occurred.  When you lodge an estimate with the CSA you will be read rights and obligations and one of them says "this estimate will be reconciled at a later date".  They don't mention how long it will take.

In my opinoin the CSA were incompetent in their duties to have estimates unreconcilied for over 10 years but they have been legislated to do this work now and challenging it on that basis alone will not get a result.  

I would also say to anyone that has a case with CSA and has not lodged a tax return for any period since the case started to expect a phone call as this is their next project, I would expect that they will go back as long as they have with this project, 1/7/1999.  

Bob
Bob,  would this include persons who were on DSP for a period of time and thus earned under the amount that was reportable to ATO?  Even if they lodged a low income with ATO?

(Sorry to hijack your thread Miner).

ajae
ajae,  the simple answer is that anyperson that has a case with CSA is required to lodge a tax return even if their income is below the reportable amount.  If you have a look at a tax return (a paper copy, not sure if it has a box on etax) it states that you must lodge if you have a case.

But in saying that if you were on a DSP for a full year and only earned say $ 16,000 for example you may be okay.  This is how CSA look at your income and how it can affect you.

In 2007 you lodge you lodge your tax return and your taxabale income for the year was 50,000.  You have failed to lodge a tax return since then.

In 2008 they would of taken your $50,000 and added CPI (inflation), I am not sure of the % but I am thinking 3% and will use that. So the income you are now being assessed on is $51,500.

In 2009 you still haven't lodged a tax return the CSA will apply a term called 2/3 MTAWE.  Not sure the exact term but it means something like two thirds medium adult wage.  But the thing is for 2009 it was somewhere in the ballpark of $33,000.

Still haven't lodged 2010, they use 2/3 MTAWE again.  The only difference to this could be if the other parent has rung and asked about the income being used and they looked into it and derived it.  This means they have searched for group certificates and found enough (I think it has to be 10 months) and have set that income.

Lets say they havent and you have been in the same job since 2007 when you lodged the $ 50,000 return you are going to have a bill when you lodge these tax returns.  As they will apply the correct ATO income over the top and the system will calculate how much you should of paid, even if the case has ended 10 years ago.

With you ajae, if you have failed to lodge but you were on DSP full the full year you will be okay, your income is under the self supporting amount so the assessment wouldn't change.  But if you hadn't lodged for a few years and they were using 2/3MTAWE you may have been assessed at a higher rate and you will not bet getting any back, it's a one way street with CSA.

But in saying that centrelink usually advise the CSA if a mutual customer has been on a benefit for the full year and they will automatically use this to derive your income.

Hope this helps explain how the incomes work if you haven't lodged.

Bob

Miner states that he always put in his tax returns on time. This begs the question why was a reconciliation done? Miner can you answer this?
BobV,

The payee in my situiation did not lodge her tax return for 2 years. What they did is used her ATI from here last tax return. The 2/3 AWE was not applied. In her last tax return she had an ATI of over $100,000 and the CSA continued to use this figure for the next year.
Bobv said
In 2009 you still haven't lodged a tax return the CSA will apply a term called 2/3 MTAWE.  Not sure the exact term but it means something like two thirds medium adult wage.  But the thing is for 2009 it was somewhere in the ballpark of $33,000.

MTAWE is the Male Total Average Weekly Earnings. In fact this is not the value that is used, it is the basis of what I term AMTAWE, which stands for Annualised Male Total Average Weekly Earnings. This amount is the basis of many core values. The Self support amount is 1/3rd of AMTAWE, the income brackets used for determining the cost of children are 0.5, 1.0, 1.5, 2.0 and 2.5 times AMTAWE.

The of 2/3rds AMTAWE, as used above is not to set the income but is used as a minimum (as per underlined and blue section below in the extract from the CSA's guide). Thus what Familyman2008 says happens, as the determined income is greater than 2/3rds AMTAWE, is correct.

Here's what the CSA Guide says about determined incomes:-

The CSA Guide - 2.4.4: Child Support Income said
Determination of adjusted taxable income

If an ATO issued income is not available, CSA may determine an appropriate amount to be the parents adjusted taxable income for a year of income (subsection 58(1)).

This decision must be in accordance with the requirements of section 58:

Determination where parent fails to comply with requirement

CSA may make a determination if:

    * a parent has not lodged a tax return for the year of income; and
    * CSA or the ATO is unable to readily ascertain the parents adjusted taxable income on the basis of existing documents or information; and
    * CSA or the ATO has required the parent to give a return or information or to produce a document for the purposes of ascertaining the adjusted taxable income; and
    * the parent has refused or failed to comply with the requirement (subsection 58(2)).

Determination where income information provided

If a parent has not lodged a tax return for the relevant year of income and CSA or the ATO has been given information (either orally or in writing) or a document that specifies or allows CSA to work out the parents adjusted taxable income, CSA may use that income information to determine the parents adjusted taxable income (subsection 58(4)). For example, the ATO may have full year payment summary information recorded for a parent.

Example

An application for an assessment is accepted in July 2008, with the first child support period being 22 July 2008 to 21 September 2009. A parent, M, has not yet lodged their 2007/2008 tax return. M advises CSA that their adjusted taxable income for 2007/2008 is $40,000. Where satisfied of the accuracy of the information, CSA uses that figure to calculate the child support assessment.


If the parent has not lodged a tax return for the relevant year of income, or the previous year of income, but CSA is able to readily ascertain the parents adjusted taxable income for the previous year of income on the basis of existing documents or information then CSA may determine the adjusted taxable income for the relevant year of income based on the information available, for the previous year multiplied by an inflation factor (subsection 58(4) and regulation 7A).

If the parent has also failed to lodge a tax return for the previous year of income, the amount determined for the parents adjusted taxable income in the above circumstances must be at least 2/3 of the annualised MTAWE figure for the relevant September quarter (subsection 58(3)). The figure to be used in assessments for child support periods beginning in each calendar year is published before the beginning of the calendar year. See Chapter 2.4.2 for the relevant figures.

Determination where tax return lodged two years ago

If a parent has not lodged a tax return for the relevant year of income but has lodged a tax return for the previous year of income, CSA may determine the adjusted taxable income based on the tax return, for the previous year multiplied by an inflation factor (subsection 58(3A) and regulation 7A). In these circumstances, CSA is able to readily ascertain the parents adjusted taxable income and it is not necessary to seek information from the parent.

Determination of overseas income where parent is a resident of a reciprocating jurisdiction

If CSA has sufficient information and documents, CSA may use that information to determine an amount of overseas income for the purpose of working out the parents adjusted taxable income (section 58C). When determining the income of a resident of a reciprocating jurisdiction CSA will look at the parents income in the last relevant year of income in the country in which the parent lives.

If CSA does not have sufficient information despite requesting income information from the parent or an overseas authority under section 162A, CSA may determine an appropriate adjusted taxable income, which must be at least 2/3 of the annualised MTAWE figure for the relevant September quarter (section 58D). If CSA does not have sufficient information to determine an overseas income and is unable to serve a notice under section 162A on the parent or the relevant central authority then CSA is unable to determine an overseas income for that parent.  

With regard to defective administration 26(a) of the Finance Circular 2009/09 entitled The Scheme for Compensation for Detriment caused by Defective Administration (the CDDA Scheme) says, as one of the definitions of defective administration :-

a specific and unreasonable lapse in complying with existing administrative procedures; or

Considering that legislation only requires tax return information to be held for 5 years, then I believe that it is unreasonable for the CSA to have delayed complying with the legislation in regards to reconciliation. This is further compounded by the fact that the ombudsman (if I recall correctly) raised the issue of the incompetence of the CSA when managing projects which included diverting funds and work basically as they wished, this obviously affecting the available resources to do reconciliations. Also my understanding is that there is very high prevalence of "pass the parcel" (or more correctly pass the in-tray, an in-tray being a case) within the CSA. I believe this was part of the findings of the relatively recent Richmond Report. However, I believe that it is greater then defective administration, it is defective management of administration for which every tax-payer deserves to be compensated for, not by the commonwealth but those who were guilty of the mismanagement.
BobV said
Lets say they havent and you have been in the same job since 2007 when you lodged the $ 50,000 return you are going to have a bill when you lodge these tax returns.  As they will apply the correct ATO income over the top and the system will calculate how much you should of paid, even if the case has ended 10 years ago.
  Bob, I don't think this is correct. We have a friend who did not lodge tax returns for a couple of years and when he finally did, CSA just used his latest tax return for the new assessment.
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