Non Agency payments - Capacity to earn
Travel Expenses and Paying for things direct instead of into mothers account (Non Agency Payments)
I am seeking assistance with two things:
1) I have seen people writing here about having the travel expenses they have collecting their children taken off their assessment. Can someone please give me a small explanation of this.
2)We have also heard that instead of the money we have to pay in child support to the mother of my childrens bank account, we can pay say their school fees etc instead. Is this correct as a few years ago my partner (the father) went out and bought the kids school bags, shoes, uniforms etc and kept the receipts because he was told he could do this instead of pay her direct and then he was told that bad luck it wouldnt be considered… so we were hoping we could pay their school fees etc instead of putting the money directly in her bank account.
Both of my partners children are getting Austudy, but again the mother keeps it all and the girls dont see it - but things like school shoes etc are not being purchased?
This has been a long and painful process working with CSA, as the girls are now almost 17 and were living with my partner and during that time the mother was on a much higher wage and my partner did not seek child support from her etc, but as he has moved away from their school they have had to live with her again and of course she changed her job instantly to a low paid job and straight back to child support!
Without boring everyone with all the ridiculous claims etc by her, we have had to change phone numbers etc due to threats, prank calls blah blah,,,, so we cannot wait to be rid of her all together when the girls turn 18, but in the meantime I have a partner who has to borrow $20 off me for fuel as he has nothing but still has to pay her.. and is suffering badly from depression… I really have to say as a single mum myself who has a private arrangement with my ex, CSA has been a nightmare and so unjust! I know naive arent i!!
I am hoping someone will be able to help me with my enquiries above so we can try and sort things out
I am seeking assistance with two things:
1) I have seen people writing here about having the travel expenses they have collecting their children taken off their assessment. Can someone please give me a small explanation of this.[
You may be able to make a claim if the costs are greater than 5% of the taxable income.
To claim such costs you would have to initiate a Change of Assessment - Reason 1 - high costs in enabling a parent to spend time with, or communicate with, a child."
The process is highly intrusive.
The COA team will very likely only have one aim and that is to maximise the amount that can be collected or transferred from the liable parent and that has been shown on a number of occasions to include not applying the very legislation that they are purportedly experts at applying.
Regarding the income reduction of the other parent then your partner should be given some solace from a Reason 8 - a parents income, property, financial resources, or earning capacity.
The pertinent point being that the other parent has shown their earning capacity and that by the sounds of it the other parent would be unable to meet the 3 criteria that allow for a reduction.
3 Criteria for establishing a Capacity to Earn
1. The parent is either:
* not working despite ample opportunity to do so (section 117(7B)(a)(i)); or
* has reduced his or her weekly hours of work to below full time work (section 117(7B)(a)(ii)); or
* has changed his or her occupation, industry or working pattern (section 117(7B)(a)(iii));
2. The parents decision about his or her work arrangements is not justified by either:
* his or her caring responsibilities (section 117(7B)(b)(i)); or
* his or her state of health (section 117(7B)(b)(ii));
3. The parent has failed to show that the decision about his or her work arrangements was not substantially motivated by the effect this would have on the child support assessment (section 117(7B)©.
Again the CSA have been shown to not apply the legislation (Ryan v Ryan if I recall correctly where SSAT pulled them up (basically CSA originally set the liable parent's income to $92,000 and receiving parents to $25,000 objection lowered liable to $62,000 and didn't change receiving parent's, SSAT set liable parent's at $58,500 and found receiving parent had capacity to earn $42,000). A massive shift of income balance.
You should be able to rely on the CSA do to what the legislation sets out for them to do under section 4, the object of the Act, to ensure that parents provide the correct financial support, however I would suggest that the largest contributor to this not happening is the CSA themselves in their incessant quest to provide figures, not actualities of children receiving support, to those they report to.
There procedurally correct action would be to initiate the COA's on both accounts.
csaconfusion said2)We have also heard that instead of the money we have to pay in child support to the mother of my childrens bank account, we can pay say their school fees etc instead. Is this correct as a few years ago my partner (the father) went out and bought the kids school bags, shoes, uniforms etc and kept the receipts because he was told he could do this instead of pay her direct and then he was told that bad luck it wouldnt be considered… so we were hoping we could pay their school fees etc instead of putting the money directly in her bank account.
You are taking about what are called non-agency payments there are two sorts non-prescribed and prescribed, for both you have to have less than 14% of care. For non-prescribed they basically need to receiving parent's agreement. Prescribed are for more essential items where it is basically neglectful of the receiving parent to not be responsible and pay for such items. It does include school fees and cost of books etc.
Here's an extract from the CSA Guide in relation to prescribed payments :-
CSA Guide - 5.3.1: Non-agency payments saidPrescribed non-agency payments
CSA can credit certain payments towards a payers child support liability regardless of the intention of the parents at the time the payment was made (section 71C), except if:
* the liability is an overseas maintenance liability (section 71C(6)); or
* at the time the payment was made the payer had at least regular care of any of the children to whom the relevant administrative assessment relates; or
* at the time the payment was made the child support liability was being fully or partially met by a lump sum credit (Refer to Chapter 5.3.3 Crediting Lump Sum Payments)
Credit can be given up to a maximum of 30% of the ongoing liability, provided that the balance of child support is paid as it becomes due and payable and the payer has less than 14% care of all of the children to whom the relevant administrative assessment relates and the child support liability is not already being met by a lump sum credit. The balance can be paid in cash or in the form of a non-agency payment credited under s71 or s71A, or from money credited from another source such as a tax refund or payment from a third party.
CSA can only credit amounts paid on or after 1 July 1999. Prescribed payments can only be credited against a child support liability and not a liability for spousal maintenance (section 71C(5)(a)). Prescribed payments cannot be credited against an overseas maintenance liability (section 71C(6)).
The types of payments that can be credited in this way are listed or prescribed by regulation (regulation 5D). They are:
* child care costs for the child who is the subject of the enforceable maintenance liability;
* fees charged by a school or preschool for that child;
* amounts payable for uniforms and books prescribed by a school or preschool for that child;
* fees for essential medical and dental services for that child;
* the payees share of amounts payable for the payees home; and
* the costs to the payee of obtaining and running a motor vehicle, including repairs and standing costs.
The date of notification of the payment is the trigger for commencing to credit up to 30% towards the current liability. If a payer satisfies the conditions and the amount of the payment is more than 30% of the enforceable maintenance liability in a given month, the payer will be said to have an uncredited amount. This uncredited amount can be applied against the payers enforceable maintenance liability in a later month provided the conditions for payment are again met.
CSA cannot credit an uncredited amount towards any child support arrears that accumulated prior to the payer notifying CSA of the prescribed payment. An uncredited amount can be applied to arrears that accumulate after the notification, but only when at least 70% of the liability is satisfied by cash or a non-agency payment credited under s71 or s71A.
A payer has a current liability of $100 per month and owes $3,000 in arrears.
In August 2008 the payer notifies CSA of a prescribed payment of $2,000 made that month, however, no payments were made direct to the payee, or to CSA.
As a result the payer still owes $3,000 and has an uncredited amount of $2,000.
If the payer pays $70 in cash (or has an equivalent amount credited as a non-agency payment under s71 or s71A) by the due date for August 2008 (7 September 2008) then $30 from the $2,000 uncredited amount is credited. The arrears of $3,000 remain. The uncredited amount is reduced to $1,970.
If the payer does not pay for the months of August, September and October but pays $280 on 7 December 2008 (being 70% of the liabilities for August, September, October and November 2008), then $120 of the uncredited amount can be credited (i.e. 4 x $30, leaving a balance of $1,880) and the arrears remain at $3,000.
If, in the above example, the payer pays $1,000 on 7 December 2008, $280 of the cash payment (70% of the liability) is applied to the liabilities raised for August, September, October and November (i.e. $400) and $120 of the uncredited prescribed payment would be credited to the account. This leaves a uncredited balance of $1,880 and the cash payment in excess of 70% of the liabilities, being $720, is credited against the original arrears of $3,000.
If a retrospective variation is made to a liability, whether it results in an increase or a decrease, the amount credited from a prescribed payment remains unchanged despite the fact that the percentage of the prescribed payment has changed.
If the payee of a private collect case later applies for registration of the maintenance liability and collection of arrears, CSA will calculate the unpaid amounts by taking into account any credit for prescribed payments that would have been available if the case were registered with CSA for collection.
If CSA is collecting child support through employer withholding, it will adjust the amount deducted to take into account the prescribed payments. If the prescribed payment constitutes 30% of the payers liability for 2 months or less then the excess cash will be refunded. If the prescribed payment constitutes 30% of the liability for a period greater than 2 months, the payer should be given the option of having their deductions reduced or given a cash refund.
Payees who are in receipt of more than base rate Family Tax Benefit need to be made aware that when a prescribed payment is notified to Centrelink it will be assessed under the maintenance income test by Centrelink even though uncredited for CSA purposes. The whole amount will be assessed on the day that the payment was made to a third party or received by the payee.
Regular care of children and/or liability being met by a lump sum credit at the time the prescribed payment was made
From 1 July 2008, a payer cannot claim a credit under section 71C when, at the time the payment was made:
* they had at least 14% care of any of the children to whom the administrative assessment relates; and/or
* the child support liability is being fully or partially met by a lump sum credit (see Chapter 5.3.3 Crediting lump sum payments)
If a parent applies to have a prescribed non-agency payment credited and the above circumstances did not exist at the time the payment was made but they exist now, the application will be accepted. However, the payer will not receive the benefit of the 30% credit against their monthly liability until those circumstances again cease to exist.
Payments made prior to 1 July 2008 but only advised to CSA on or after 1 July 2008 will be accepted and credited, regardless of the level of care the payer has of any of the children at the time of applying for the prescribed non-agency payment to be accepted.
The payer F asks for a payment of $1000 to be credited as a prescribed non-agency payment on 20 November 2008. The payment was for school fees for F and Ms children and was made on 8 July 2008 at which time F had below regular care of both children. F currently has below regular care of one of the children and regular care of the other child.
The amount claimed is accepted as a non-agency payment as F had below regular care of both children at the time the payment was made. However, F will not currently receive the 30% credit against his ongoing liability as he now has regular care of one of the children. If, in the future, F again has below regular care of both children he will start to receive the 30% credit against his ongoing liability.
WA ex-nuptial cases
The Families, Housing, Community Services and Indigenous Affairs and Other Legislation Amendment (Further 2008 Budget and Other Measures) Act 2008 amended section 71C from 6 January 2009. This amendment provides that if the payer is claiming a credit when the above conditions exist, a decision not to accept the credit is made under s71C.
This amendment does not yet apply to WA ex-nuptial cases and as such if the above conditions exist when a credit is claimed, a decision to refuse to credit will still be made under s71D.
See Chapter 1.4.2 Application of the Registration and Collection Act for information on provisions that do not apply to WA ex-nuptial cases.
Child care costs for the child who is the subject of the enforceable maintenance liability
A payer can claim credit for amounts paid for child care, less any amount that is refundable by the Family Assistance Office. The possibility of receiving a child care rebate in the future will not be taken into account in calculating the amount that can be credited.
Fees charged by a school or preschool for a child who is the subject of an enforceable maintenance liability
This can include school fees and levies, but not payment for non-compulsory camps, excursions, additional tuition or boarding costs. A school is an institution which mainly provides primary or secondary education.
It includes an institution providing technical and further education where the payment is for a course of secondary education.
Amounts payable for uniforms and books prescribed by a school or preschool for a child who is the subject of an enforceable maintenance liability
From 12 April 2001 a payer can claim credit for books and uniforms prescribed by a school which they have obtained from any source. (CSA could previously only credit an amount paid for uniforms and books that the payer purchased from the childs school or preschool.) Amounts payable for books includes text books and exercise books but not stationery, computers, etc. Amounts payable for uniforms includes a school bag if prescribed by the school.
Fees for essential medical and dental services for a child who is the subject of an enforceable maintenance liability
Essential medical and dental services are not limited to those services provided in an emergency.
A payer can claim only their actual costs. CSA will credit only the net amount after any rebate the person can claim from Medicare or a health insurance fund.
Prescribed payments include essential consultation fees for services provided by medical and dental practitioners, treatment by specialists, eye testing, X-rays, pathology tests, examinations and certain out-of-hospital surgical procedures by Medicare approved practitioners. The cost of medication associated with essential treatment is also included, as well as equipment such as crutches or a vaporiser.
Prescribed payments include in-hospital costs either as a public patient, or as a private patient in a public or private hospital. Costs can include accommodation and items such as theatre fees, anaesthetist costs, pathology, X-rays and medicines.
Prescribed payments may also include fees for medical or dental services not covered by Medicare, if they are essential for the child in the opinion of a practitioner approved by private health funds. These services include:
* emergency ambulance services;
* speech and eye therapy;
* chiropractic services;
* psychological services;
* optometry and repairs.
CSA will not allow a credit for fees for surgery or dentistry performed solely for cosmetic reasons. Where there is a doubt a parent could ask the service provider for more information.
The cost of a nose reconstruction carried out by a cosmetic surgeon purely for cosmetic reasons would not be acceptable as a prescribed payment. But the cost of a nose reconstruction which alleviated a breathing difficulty or was performed following an accident would qualify.
The cost of orthodontic work performed solely for cosmetic reasons will not qualify as a prescribed payment. However, if a general practitioner or orthodontist indicated that the work was necessary for the childs psychological wellbeing or essential dental health it may be justified.
The payees share of amounts payable for the payees home
* the payees share of amounts payable for rent or a security bond for the payees home;
* the payees share of amounts payable for utilities, rates or body corporate charges for the payees home; and
* the payees share of repayments on a loan that financed the payees home.
Payments for utilities include gas, electricity, telephone and water.
Where the payer makes payments for which they and the payee are jointly responsible, CSA will credit only the payees share. In the absence of evidence to the contrary, this will be half the total amount.
Prescribed payments can only include those for a home in which the payee lives however the bill does not need to be in the payees name.
The parents separate in March 2007 and the payee continues to live in the home they shared. The home has gas connected which is in the payer's name because the payer had originally organised the connection when they had moved into the home. The payer pays a gas account (that is in the payers name) of $500 in November 2007 which covers the period from 1 July 2007 until 30 September 2007. The payee and children were residing in the home and thus solely benefited from the payment of the gas bill. The payer applies for credit of this $500 as a prescribed non-agency payment. CSA will credit this amount.
Costs to the payee of obtaining and running a motor vehicle, including repairs and standing costs
This only includes payments that are necessary to keep the vehicle on the road and to maintain its safety. They can include car loan repayments or the payees share of joint car loan repayments. They can also include non-compulsory insurance premiums where the payee is an existing contributor.
Discretion to refuse to credit an amount
CSA can refuse to credit a non-agency payment claimed under sections 71, 71A or 71C if satisfied that, in the circumstances of the particular case, the amount ought not to be credited (section 71D).
CSA may refuse to credit an amount in certain circumstances, including, but not limited to, the following:
* The payees agreement to credit an amount paid to a third party or payment made as a transfer of property was obtained through coercion or harassment. (However, where CSA is informed about this after it has credited the payment, it will be necessary for the payee to object to CSAs decision to credit the amount.)
* The payer is claiming a credit under section 71C for an expense they regularly meet that was taken into account in a change of assessment decision. For example, CSA or a court has reduced the annual rate (or refused to increase it) because the payer usually pays school fees, medical expenses for the child, mortgage or rent payments or any other prescribed payments.
* The payer is claiming credit under section 71C for an expense which they have undertaken to pay in addition to their liability as specified in a child support agreement.
* The payer is claiming credit under section 71C for an expense that they are responsible to pay under the terms of a court order.
* The payer is claiming credit under section 71C for expenses for the child for which they are separately responsible.
A payee can object to CSAs decision to credit a non-agency payment (section 80).
A payer and a payee can object to CSAs decisions to refuse to credit a non-agency payment (section 80).
If a non-agency payment is not credited there may be other options available such as:
* applying for a variation to a court ordered liability (See Chapters 2.8.1 and 4.3.2);
* applying for a change of assessment under Part 6A of the Assessment Act (See Chapter 2.6);
* applying for a departure order under part 7, Division 4 of the Assessment Act (See Chapter 4.3.2);
* applying for an order under Part 7, Division 5 of the Assessment Act to have non-periodic or payments to third parties credited against an assessment (See Chapter 4.3, Applications and orders under the Assessment Act);
* making a child support agreement under Part 6 of the Assessment Act providing for non-periodic amounts or payments to third parties to be credited against an assessment. (See Chapter 2.7).