2.6.8 Reason 2 - the special needs of the child
Context
A parent or non-parent carer can apply for a change of assessment in special circumstances if the costs of maintaining a child are significantly affected by the child's special needs.
On this page
- Grounds for departure under Reason 2
- When are the costs of maintaining a child significantly affected?
- Do the additional costs make it 'just and equitable' to change the assessment?
- The kinds of changes to an assessment that reflect the special needs of a child
- The effect of a change to an assessment on any means-tested assistance from government
- How long will a decision to change the assessment under this reason apply?
- The interaction of Reason 2 & the provisions for credit of non-agency payments
Grounds for departure under Reason 2
There may be a reason for changing an assessment if in the special circumstances of the case, the costs of maintaining a child are significantly affected because of the special needs of the child (CSA Act section 117(2)(b)(ia)).
The phrase 'special circumstances of the case' is not defined in the CSA Act. The Family Court held that 'it is intended to emphasise that the facts of the case must establish something which is special or out of the ordinary' (Gyselman and Gyselman (1992) FLC 92-279).
A party can apply to change the child support assessment if they consider that the cost of meeting the special needs of a child significantly affects the costs of maintaining the child.
The term 'special needs' is not defined in the legislation. There must be some evidence that the needs of the child relate to a condition or disability that is out of the ordinary. These special needs can be because of a physical, mental or learning disability or because of a special talent or ability of the child. They may result in costs that are essential or desirable for the child's welfare that are outside the ordinary costs of a child that can be met from an administrative assessment (Lightfoot v Hampson (1996) FLC 92-663).
Example: A condition that is distinct from the usual childhood illnesses suffered by a child may be a condition that is out of the ordinary.
A long-term or short-term physical, mental or learning disability may constitute such a condition.
The costs of orthodontic treatment that is considered to be essential or desirable for a child's welfare may be significant enough to affect the costs of maintaining the child.
In some cases, needs which arise from such special talents that are likely to lead to particular success or prominence may be considered 'special needs'. Gifted sports people could be considered to have special needs (Blamey and Blamey (1995) FLC 92-554).
A child's special needs will often be a fact accepted by both the payer and payee. However, in cases where there is a dispute, the person who seeks to rely on this reason will need to provide documentation, such as medical evidence (2.6.5), to substantiate their claim. Similarly, the party making the application will need to provide evidence of the net expenditure associated with the special need, unless it is clear that the respondent accepts the other party's claim.
When are the costs of maintaining a child significantly affected?
If a child has special needs, the Registrar will consider whether the costs of maintaining the child are higher because of the costs related to the special needs. The special needs must involve a cost that is additional to the normal needs of a child that are expected to be met from the child support assessment. For an assessment to be changed, the costs must result in a need for further financial support in addition to that provided by the child support assessment.
The fact that the child suffers from a severe disability or has a special ability does not, in itself, mean that an assessment should be changed. The overall test is whether the costs of supporting that child are significantly different from those faced by most other parents. If the costs are only slightly higher than usual they might not be considered to significantly affect a parent's ability to provide financial support for the child.
In some cases, a child may suffer from an illness that is easy and relatively inexpensive to treat but, because of complications, the expenses associated with that condition are significant in the short-term. In other cases, the child may have a disability but the costs associated with that disability are nominal in terms of the parent's out-of-pocket expenses. This may be because the parent receives significant subsidies from the government in relation to medication, therapy or treatment or because another person meets the expenses associated with the condition. This may include payments or financial assistance received under the National Disability Insurance Scheme in respect of the child. Such payments or subsidies should be taken into account when determining the net expenses incurred by the parent.
Do the additional costs make it 'just and equitable' to change the assessment?
Once it is established that the costs of maintaining the child are significantly affected, the Registrar must consider whether it would be just and equitable (2.6.17) to the child, the payer, and the payee and otherwise proper (2.6.18) to make a particular determination (CSA Act section 98C(1)(b)(ii)).
If a special need exists and it significantly adds to the costs of maintaining a child, the Registrar must decide on the amount by which those costs exceed the usual or expected costs. The Registrar will consider the financial circumstances (including assets) of the parents to decide who has the capacity to meet the additional expenses, given the assessed rate of child support. Either parent may be able to contribute towards the child's additional expenses, taking into account their individual financial circumstances.
In determining whether a change to the assessment is just and equitable, the Registrar will look at all the income, earning capacity, property and financial resources of both parents and the child (see 2.6.17 for more information on when a decision is considered to be 'just and equitable').
This may include consideration of non-taxable carer payments received by the parent including carer allowance or one-off payments such as carer supplement, child disability assistance payment or carer adjustment payments. These payments are intended to assist with the direct and indirect costs of the child's disability. While payments or financial assistance received under the National Disability Insurance Scheme as part of a child's support package are not counted as income for child support, the Registrar will consider them to determine the net expenses incurred by the parent.
If the parent's current income is different from his or her ATI (2.4.4.10), this will also be a factor for the Registrar to weigh up in considering whether it would be just and equitable (2.6.17) to change the assessment.
The kinds of changes to an assessment that reflect the special needs of a child
The kind of decision made will depend upon who is bearing the costs of the child's special needs. The additional costs of maintaining a child with special needs should be readily quantifiable. If the payee is meeting those expenses, it would usually be fair to apportion a percentage of responsibility for those costs to each parent according to their share of the combined child support income, and increase the assessment by the annual amount of the payer's share of the costs.
Where a payer is bearing the costs of the child's special needs, it may be appropriate to increase the assessed costs of the child, apportion the additional cost between the parents according to their respective shares of the combined child support income, and decrease the amount of child support payable by the costs that the payer is meeting directly. Alternatively, it may be appropriate to adjust their self-support amount (2.4.4.20) (called the 'exempted income amount' in the child support formula pre July 2008) to reflect the amount that they would have to earn to meet the costs of the special needs of the child (using the method in Houlihan and Houlihan (1991) FLC 92-248). This allows the parents to use other administrative processes, if necessary, such as an estimate of current income. This approach will not produce a fair result in every case, as the value of the financial relief to the parent can be low, but it may be used when this reason is considered in isolation from other reasons. The final decision will depend on the circumstances of the case and any other reasons under consideration.
The effect of a change to an assessment on any means-tested assistance from government
Generally, any child support received by a payee is considered to be maintenance, and will affect the payee's entitlement to FTB Part A at more than the base rate.
Maintenance that is paid specifically for the child's disability expenses is not assessable under the MIT. However, not all special needs costs are considered disability expenses for FTB purposes. Disability expenses are those relating to a physical, psychological or intellectual disability or a child's learning difficulties. If a decision is made to increase a child support assessment based wholly or partly on the child's special needs, the notice of decision will clearly identify the component that relates to those special needs. The payee can then ask Centrelink to consider whether that amount should be disregarded for FTB purposes.
How long will a decision to change the assessment under this reason apply?
Where there is a change to an assessment because of the special needs of a child, the period of time the decision covers will depend upon how long the child is likely to require additional financial support. If a child has an ongoing or chronic illness or condition, the decision to change the assessment may be for a long time. If the special need relates to a short-term condition (e.g. orthodontic work or treatment for an injury or a specific activity such as a sports camp) the change may be for a shorter time.
The interaction of Reason 2 & the provisions for credit of non-agency payments
A payer who makes certain types of payments to third parties, including fees for essential medical and dental services for a child, is generally able to have those payments credited towards their liability to pay child support for that child, even if the payee did not intend that the amount be for child support. However, this option is not generally available if the Registrar has already taken into account those costs met by the payer in making a decision to reduce or refuse to change the assessment, and is only available if the payer has less than regular care (2.2.1) of all of the children to whom the relevant administrative assessment relates. See 5.3.1 for further information on non-agency payments.