2.3.2 When do child support periods start?
Context
The Registrar must make new assessments at particular times. A new assessment starts a new child support period. Amending an assessment, for example because a parent has lodged an estimate of their income, does not start a new child support period.
Act references
CSA Act section 7A, section 31, section 34A, section 34B, section 34C, section 40B, section 93
On this page
The Registrar must periodically make new assessments, which apply to new child support periods, in the following circumstances:
- Accepting an application
- Accepting a child support agreement that starts a new case
- Accepting a child support agreement on an existing case where the agreement affects the rate of child support payable
- The Registrar makes an assessment when the ATO issues an income tax assessment for one of the parents
- Exceptions - income tax assessments that will not require the Registrar to make a new assessment
- Income tax assessments that issue in June for the previous financial year
- Can the Registrar start a child support period retrospectively under section 34A?
- After the end of a child support period
Accepting an application
The Registrar must make an assessment as quickly as practicable after accepting a new application for an administrative assessment of child support (CSA Act section 31(1)). The child support period for this assessment starts on the day that the application was received (CSA Act section 7A(2)(a)).
A new child support period will not be initiated by:
- an application from a non-parent carer to receive child support under an existing child support assessment (that is, there is already an assessment between the parents for the child and there has been no terminating event) (CSA Act section 40B(3)), and
- an application to add a new child to an existing case.
Instead, the Registrar will amend the existing assessment to take account of these events.
Accepting a child support agreement that starts a new case
The Registrar must make an assessment as quickly as practicable after accepting a child support agreement that starts a new case (CSA Act section 93(2)). An assessment and child support period will start on the day that the liability to pay child support starts, that is from the day on which the application for acceptance of the agreement was made to the Registrar (CSA Act section 7A(2)(b) and 93(1)(g)).
Accepting a child support agreement on an existing case where the agreement affects the rate of child support payable
The Registrar must make a new assessment immediately after accepting a child support agreement in an existing case if the agreement affects the rate of child support payable (CSA Act section 34B(1)). The new assessment applies to a new child support period that starts on the day that the agreement alters the rate of child support payable (CSA Act section 7A(2)(c)). For more details of the date of effect of a child support agreement where child support is already payable, see 2.7.4.
The Registrar makes an assessment when the ATO issues an income tax assessment for one of the parents
The Registrar must make a new assessment when an income tax assessment issues for either parent for the latest financial year that ended during the existing child support period (exceptions detailed below) (CSA Act section 34A). The Registrar must do this as soon as it is practicable after the ATO issues the assessment (CSA Act section 34A(2)).
Generally it is practicable to make an assessment in the month that the tax assessment issues if it issues on or before the 15th of the month. If the tax assessment issues after the 15th of the month the Registrar will make the assessment in the following month and commence that assessment and a new child support period on the first of the month after that.
The new assessment applies to a new child support period that starts on the first day of the month after the month in which the assessment was made (CSA Act section 7A(2)(d)).
Exceptions - income tax assessments that will not require the Registrar to make a new assessment
The Registrar may not be required to make a new child support assessment and start a new child support period when the ATO issues an income tax assessment (for the latest year of income that ended during the existing child support period) in the following circumstances:
- the income tax assessment could not affect the rate of child support currently payable,
- the other parent's income tax assessment for that year has already started a new child support period,
- the assessment is based on a change of assessment decision, court order or child support agreement, or
- the current child support period is ending in the same month as the income tax assessment issues.
Income tax assessment could not affect the rate of child support
The first exception is where the tax assessment could not affect the rate of child support payable, for example because the parent's income continues to be below the self-support amount (CSA Act section 34A(3)(a)).
Example 1: Casey has a care percentage of 100% for 2 children. The assessment is based on the last relevant income for Casey of $18,140 and for the other parent, George, of $26,314. On 14 July 2011, Casey's 2010-11 tax return issues and the adjusted taxable income is $17,135.
As Casey's income continues to be below the self-support amount and will not affect the rate of child support payable, the Registrar is not required to make a new assessment and start a new child support period.
Casey's 2010-11 income will be used in the new child support period which will commence after the end of the 15 month period or after George lodges a tax return with an adjusted taxable income that affects the rate of child support payable (whichever is earlier).
Example 2: Sarah has a care percentage of 100% for 2 children. The assessment is based on the last relevant income for Sarah of $27,400 and the other parent, Chris, of $26,314. On 10 July 2011, Sarah's 2010-11 tax return issues and the adjusted taxable income is $17,135.
As Sarah's income is lower than the income that is currently used in the assessment, and this will affect the rate of child support payable, the Registrar is required to make a new assessment and start a new child support period from 1 August 2011.
A new child support period has already started during the current financial year
The second exception is where a new child support period has already started during the income year. For example, a new child support period has started because the Registrar has accepted a new agreement, or the other parent's income tax assessment for that year has already started a new child support period.
Example: Peta and Steven's child support assessment commenced on 1 April 2011 with an annual rate of $2,146 based on the 2009-10 taxable incomes.
Peta lodges her tax return and, on 28 September 2011, her 2010-11 tax assessment becomes available. A new child support period starts on 1 November 2011 using Peta's 2010-11 adjusted taxable income of $47,236 and a provisional adjusted taxable of $32,231, determined by the Registrar, for Steven.
Steven's 2010-11 tax return issues on 3 December 2011 and his adjusted taxable income is $34,635. As a new child support period has already started during the income year (to use Peta's adjusted taxable income of $47,236), the Registrar will not be required to make a new assessment and start a new child support period as a result of Steven's tax return issuing.
When the assessment was made, an income determined by the Registrar will have been used for the parent (or parents) whose income tax assessment had not yet issued. When the parent's income tax assessment subsequently issues for the same year, it does not trigger a new child support period. The income tax assessment is not for a financial year that ended during the current child support period. The Registrar will amend the existing assessment by replacing the Registrar determined income. The assessment continues and applies to the same child support period.
Similarly, if an amended tax assessment issues for either parent, it will not start a new child support period, but the Registrar may amend the existing assessment to take into account the amended tax assessment.
Assessment based on a change of assessment decision, court order or agreement
The third exception is where a departure decision, court order or child support agreement is in place that does not use the parent's taxable income to work out the rate of child support (CSA Act section 34A(3)(b)).
If the child support agreement, departure decision or court order ceases at some time during the existing child support period, the Registrar is required to make a new assessment when the income tax assessment will affect the rate of child support. The Registrar makes a new assessment during the last calendar month in which the child support agreement, departure decision, or court order has effect. This new assessment applies to a period that starts on the first day of the month following the making of the assessment (CSA Act section 34A(2)).
Most child support agreements, court orders and departure decisions will end on the last day of a month. If not, the assessment will revert to the formula using the last relevant year of income for the current child support period until the last day of the month. The new assessment using the later year of income will apply to a period that commences on the first day of the month after which the Registrar makes that assessment (CSA Act section 34A(2)).
Current child support period ending in the same month
The fourth exception is where the existing child support period will finish before the end of the month in which the income tax assessment issues. In these cases, a new child support period starts on the day after the end of the current child support period, rather than the first day of the following month (CSA Act section 34A(3)(c)).
Income tax assessments that issue in June for the previous financial year
When the ATO issues an income tax assessment that requires the Registrar to make a new assessment, a new child support period starts. The new income tax assessment will relate to the parent's taxable income for the last relevant year of income in relation to the new child support period. The exception is where the Registrar makes a new child support assessment in June to apply to a child support period that starts on 1 July (e.g. when ATO issues an income tax assessment for 2009-10 in June 2011). The last relevant year of income for that new child support period will be the financial year after the year of the income tax assessment i.e. 2010-11.
For these cases, the Registrar will make a new child support assessment based upon a default child support income amount for the last relevant year of income for both parents. When the ATO issues each parent's income tax assessment for the last relevant year of income, the Registrar will amend the child support assessment from the start of the child support period (replacing default income with actual income).
Can the Registrar start a child support period retrospectively under section 34A?
If the Registrar missed making a new assessment when a parent's income tax assessment issued, a retrospective assessment cannot be made (CSA Act section 34A(2)). The Registrar will make a new assessment at the earliest appropriate time in accordance with the business rule explained above. If a new financial year has started before the Registrar discovers the error, and the last relevant year of income has therefore changed, the Registrar will not be able to make a new assessment based on that income tax assessment. However, the Registrar can amend the existing child support assessment using financial information from the income tax assessment if the information is more accurate for the purposes of the assessment.
After the end of a child support period
The Registrar must make an assessment before the start of a new child support period if an assessment has not already been made for one of the reasons listed above. If the Registrar has not made a new assessment before the start of a new child support period this must be done as soon as practicable after it starts (CSA Act section 34C). The child support period for this kind of assessment will start on the first day after the day the earlier child support period ended (CSA Act section 7A(2)(d)).