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"Fixed Assessment" applied for ease of administration

I am posting this information in an effort to alert young parents that they may be required to pay child support amounts determined by the Child Support Agency well in excess of their capacity to pay. If your "Child Support Assessment" letter contains the phrase "a fixed assessment has been applied" and you are not self employed, then it is probable that you are paying many times more than anyone else on the same income. And the application of a "fixed assessment" will probably have been applied for no reason other than (I quote CSA) "for ease of administration".

My son was paying over three times the amount that others on the same income were paying. We only discovered this by pure accident. He was a first year apprentice at the time and the extra financial burden hurt him a great deal. When he enquired as to why he was required to pay more he was simply shrugged off. That was when I became involved.

It took me many months to find out that a "fixed assessment" is automatically applied to parents who report a low taxable income and are not social security recipients. In my sons case he had earned around $2000 in his school holidays in the tax year prior to his daughter being born. We wondered why someone in this situation would be required to more than someone who reported a taxable income of $18000 per annum, which was his income at the time. The CSA simply refused to provide any explanation other than it was because he had previously reported a low taxable income.

Months later we found out what a "fixed assessment" was, quoting an obscure section of the CSA website-

Fixed assessments cover parents who minimize their taxable income in a way that does not fairly represent their true income or real capacity to pay child support.

Apparently anyone reporting a low income, and is not a social security recipient is treated automatically as a tax cheat, purely on the basis of "ease of administration". What is even more alarming is that CSA will go to great lengths to conceal this fact.

I dont have the time to describe the hell my son went through in order to correct this wrong. All I will say is that CSA put up every obstruction possible to prevent him from mounting any sort of effective appeal. They went to enormous lengths to ensure no appeal could ever reach the Social Security Appeals Tribunal, which is an independent review body. In the end the Ombudsman Office suggested an appeal method, and months later we found that "fixed assessments" are applied for "ease of administration" and wrongly applied in my sons case, and I suspect in most other cases, and his child support assessment was ammended. Unfortunately by this time the 15 month period the assessment covered was well and truly past.

Of course CSA could offer no method of reimbursement for my son, other than to suggest he withhold child support payments, a method I believe to be unlawful. In the end I accidently came across a form called "claim for compensation" which my son submitted, and was he was sucessfull in recieving full compensation of overpayments.

I dont have a very high opinion of CSA, words cannot describe my loathing for this organisation. My son attempted suicide and went very close to being sucessfull, largely due to his treatment by CSA, who, not surprisingly, have never even bothered to issue any sort of apology for what they did to him. I hope my post will help inform others in a similar situation and perhaps even prevent them from following a similar path towards self destruction.






 

Ghosta,
           thank you for showing concern in regards to fixed assessments. However, you have missed an an important aspect. That is that fixed assessments are only applied to parents who have less than shared care (i.e. less than 35%) thus basically supporting those with shared care or greater in minimising their taxable income.

However, I find it weird that in another post that you complain about this site being elitist and not for you but you use this site for yourself. Of course you could have saved yourself a lot of time finding out about fixed assessments if you happened on this site before. As an example, if you had used the Advanced Child Support Calculator then the results for your son would have included:-

The Advanced Child Support Calculator said
If not on income support and care is less than 35% (128 nights), and your ATI is less than the Parenting Payment Single($17256), then a fixed assessment rate of $1294 applies per child (up to a maximum of 3 children).

As this calculator is superior to the CSA's you may wish to inform others of it's availability on this site. As a summary, the calculator is easier to use (one single page), it performs calculations for the scenarios that the CSA's estimator cannot handle (e.g. multi-case and non-parent carer scenarios), it is more reliable (last I heard was the CSA's estimator had been down for many days) and it can be more informative (if the "show calculations" checkbox is ticked then you are provided a whole host of underlying values all of which have explanatory text that is displayed when you move the mouse over the question mark icon (?).


I assume that your son has now lodged an application for the Fixed Rate to not be used. Just in case you are not aware of the CSA guide, here's a couple of links in regard to fixed assessments:
The CSA Guide - 2.4.11: Fixed annual rate of child support for certain low income parents
The CSA Guide - 2.5.3: Application to have the fixed annual rate of child support not used
Mike T you are not the only one who finds this topic difficult to understand. It might help if you read my post again and you will see its objective is to warn others. I hope your post does not unduly confuse others who may be in need of information.
Ghosta,
          I don't find the topic of fixed annual rate difficult to understand. In fact it is a relatively easy area to understand. Rather I was elaborating and pointing out the underlying bias and fact that the fixed rate doesn't apply if the parent has at least shared care. I could imagine that if you posted your warning elsewhere without the level of care disclaimer then you could get responses basically saying that "I'm not on income support and have a low income but have not been subject to fixed assessment".  

I did understand your objective to warn others and did consider posting other warnings that you could distribute, but decided not to as I wasn't sure whether you would understand those topics (e.g. One of the most destructive areas is with "Departures from Formula based Assessment", normally referred to "Change of Assessment", especially when applied to the small business owner or self-employed (if the liable parent)).

To summarise the statement "Apparently anyone reporting a low income, and is not a social security recipient is treated automatically as a tax cheat, purely on the basis of "ease of administration". What is even more alarming is that CSA will go to great lengths to conceal this fact.". Is not correct. It would be correct if it were:

"Apparently anyone reporting a low income, who is not a social security recipient and who has less than shared (35% or 128 nights) care, is treated automatically as a tax cheat, purely on the basis of "ease of administration". What is even more alarming is that CSA will go to great lengths to conceal this fact."

It could be argued that it is nor purely for ease of administration. In fact the underlying cost saving goes further than simply deploying easier administration, as you have to consider one of the prime reasons, if not the prime reason, that governments around the world adopt CS programs. That reason is the claw back of social security payments. In Australia it is the clawback of FTB. i.e. FTB part A is reduced by 50c for a $1 collected in many situations. Basically CS is a tax in all but name.

I don't think that it is correct to accuse the CSA of going to great lengths to conceal the information. The information is readily and publicly available (e.g. the CSA Guide and the legislation). Rather they frequently do not provide those they serve with an adequate and comprehensive service. There is not just the one reason of conspiring to conceal information. However, the reasons for this lack of the provision of an adequate service is a debate in itself. For example we have been asking the CSA to provide a guide for the self-employed/small business owner for many years.

Perhaps, you could persuade Secretary_SPCA to put forward an emerging issue to CSNSEG (Child Support National Stakeholders Group). That whenever an automated fixed rate is applied that the parent to whom it is applied is notified that they can apply for it to not apply. If this were adopted then it would overcome many, if not all, of the arguments that your warning is comprised of.

Last edit: by MikeT

Mike it is FTB A that is reduced by 50c for every $1 of child support recived over the Maintintanace income free area

Thanks Missali. I've corrected my post. I often get A and B mixed up.
MikeT said

It could be argued that it is nor purely for ease of administration. In fact the underlying cost saving goes further than simply deploying easier administration, as you have to consider one of the prime reasons, if not the prime reason, that governments around the world adopt CS programs. That reason is the claw back of social security payments. In Australia it is the clawback of FTB. i.e. FTB part A is reduced by 50c for a $1 collected in many situations. Basically CS is a tax in all but name.


If you have only one child in the assessment, the being assessed to receive the Fixed Annual Rate won't effect your FTB part A amount as its still below the Maintenance Income Free Area. Its when you start having more than one child on the Fixed rate where the claw back comes into it as your child support assessment doubles but your MIFA doesn't. That's been one of my bigger issues with the MIFA as it disadvantages larger families.
The Cheese said
If you have only one child in the assessment, the being assessed to receive the Fixed Annual Rate won't effect your FTB part A amount as its still below the Maintenance Income Free Area. Its when you start having more than one child on the Fixed rate where the claw back comes into it as your child support assessment doubles but your MIFA doesn't. That's been one of my bigger issues with the MIFA as it disadvantages larger families.

I don't believe that this is in fact the case. I believe that if a parent who has a single child and has a partner then that parent's partner's income is taken into consideration when determining the "Family's income" and the FTB payments may then be reduced due to CS received. As such I also don't believe that it disadvantages larger families rather that payments are reduced according to the level of income and that the additional payments for subsequent children compensates for the increased payments. However, I do believe that children of separation are disadvantaged due to the consideration of three adult's incomes (the FTB recipient's income, the partner's income and  the other parent's income).

In fact, if you use the DHS estimator (FTB only option and using close to average incomes (i.e. Parenting Payment Single is about $17,000 and average taxable income is about $60000). Then FTB A for a single child reduces even without considering partner as per examples 1 & 2 (where example 2 has CS received). Thus it would appear that even without a partner, what you believe is not the case at all. That is that it appears that CS does reduce FTB A for the single child situation. It appears that a partner's income doesn't affect FTB A but rather it reduces FTB B (as per all three examples).

However, I cannot vouch for the accuracy of the Estimator(s), so you may wish to point out any errors you find to the DHS and also explain how the DHS's estimator is incorrect in these pretty basic scenarios.

Example 1 - Single child (13+ 250 nights care), non-partnered parent, income used $17,000, no rent, no CS. Result FTB A = $220,64 per fortnight, FTB B = $100.66 per fortnight ($8376.75 pa combined).
Example 2 - Single child (13+ 250 nights care), non-partnered parent, income used $17,000, no rent, CS @ $5,000 pa. Result = FTB A = $152.46 per fortnight, FTB B = $100.66 per fortnight ($6599.20 pa combined).
Example 3 - Single child (13+ 250 nights care), partnered parent, income used $17,000 + $60,000 (partner's income), no rent, CS @ $5,000. Result = FTB A = $152.46, FTB B = $8.82 per fortnight ($4204.80 pa combined).
Example 4 - Single child (13+ 250 nights care), partnered parent, income used $0 + $60,000 (partner's income), no rent, CS @ $5,000. Result = FTB A = $58.94 per fortnight, FTB B = $100.66 per fortnight ($4161.00 pa combined).

Note - These amounts do not include the Family Tax Benefit Part A Supplement and the Family Tax Benefit Part B Supplement.

Note - Example 3 would not be a real situation as PPS (or any income support) would or may not be paid if there is a partner who had such an income, rather example 4 would reflect the real situation.
ghosta said
  "ease of administration". What is even more alarming is that CSA will go to great lengths to conceal this fact.

 All I will say is that CSA put up every obstruction possible to prevent him from mounting any sort of effective appeal. They went to enormous lengths to ensure no appeal could ever reach the Social Security Appeals Tribunal, which is an independent review body.
 
  Thats what the CSA does to people Ghosta so the average person excepts there decision as being correct.
taylor said
Thats what the CSA does to people Ghosta so the average person excepts there decision as being correct.
 taylor so you are saying that the average person does NOT accept the decisions as correct?
Except and accepts are entirely different words - but in your usage have the opposite meaning.

You must have used there/their incorrectly dozens of times in these forums.

Perhaps you have trouble with the CSA because they cannot understand you?
Taylor, I agree with what you are saying, ( I had no trouble understanding what you meant).  CSA operate on the principle of "keep them i the dark and feed them bulldust". Even requests under freedom of information provisions were treated like that. They certainly are not used to someone one NOT giving up and boy do they hate it.
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