18.104.22.168 Child Support Case Ended - Payer not a Parent of the Child
Where a payer (1.1.P.72) is found not to be a parent of a child it may impact on both the payee (1.1.P.71) and payer. The payee's FTB Part A entitlement may be affected if they are entitled to receive more than the base rate of FTB. The payer's (or their current partner's) entitlement may be affected if they have received FTB for part or all of the same period.
The payer may no longer be considered a parent of a child in respect of whom maintenance was paid in the following circumstances:
- where a court decision under the Child Support (Assessment) Act 1989 section 107 is made. Where this decision is made it is decreed that the Child Support Registrar has never accepted the original child support application. The court may or may not require the payee to repay the money they received for the subject child, or
- the payee elects to end their child support assessment under the Child Support (Assessment) Act 1989 section 151A because of evidence which suggests that the payer is not a parent of a child (e.g. DNA test). Instead of forcing the payer to take the matter to Court, the payee can elect to end the child support case. They may request to end their case from a specified day, which must be a day after the election to end the assessment is made.
Act reference: Child Support (Assessment) Act 1989 section 107, section 151A
Effect on the payee's entitlement to FTB
Where a Court decision under the Child Support (Assessment) Act 1989 section 107 is made, the payee may incur a child support overpayment. In this situation, all child support payments paid to the payee cannot be considered as maintenance income for FTB purposes as it is no longer considered that the payment was made by a parent of the child. Therefore, the child support payments do not count for the purposes of the maintenance income test for the particular child.
The effect of this is that the payee may have been paid a reduced rate of FTB and, therefore, may be entitled to a top-up of FTB for all income years for which child support payments had previously been assessed.
Where either a decision is made under section 107, or the payee elects to end their assessment, the payee should be granted another period of grace to commence reasonable maintenance action of at least 14 days and no more than 28 days from the date of the court decision under section 107 or the date the payee elects to end the child support assessment. If the other parent is known, generally the payee must apply for a child support assessment against the other parent to continue to receive more than the base rate of FTB Part A. This may involve taking legal action to prove parentage. If the other parent is not known or the payee has not been successful in proving paternity, they may apply for an exemption from the maintenance action test.
Act reference: FAAct section 3(1)-'maintenance income'
FA(Admin)Act section 109D(2) Exception - Secretary may extend time limits in special circumstances
CS Guide 2.10.2 Electing to end an assessment
Effect on the payer's entitlement to FTB
Where the payer is found not to be the parent, DCME can no longer be classed as child maintenance. For re-reconciliation to occur, an amended ATI must be provided, the result of which will be either a nil result or an FTB overpayment.
Given the nature and outcome of these cases for the payer, in some circumstances it may be appropriate to waive the overpayment. The following guidelines apply to determine whether or not the payer should repay the FTB overpayment.
|Court orders repayment of the child support to the payer.||The FTB overpayment is raised.|
|Court deems that child maintenance does not need to be repaid because to do so would be detrimental to the welfare of the child.||The FTB overpayment is not raised.|
|The court orders repayment of the child support but, for example, over such a protracted period of time that the payments would have an insignificant financial impact on the payer.||The FTB overpayment is not raised.|
Policy reference: FA Guide 3.2.7 Deductible Child Maintenance Expenditure