The Guides to Social Policy Law is a collection of publications designed to assist decision makers administering social policy law. The information contained in this publication is intended only as a guide to relevant legislation/policy. The information is accurate as at the date listed at the bottom of the page, but may be subject to change. To discuss individual circumstances please contact Services Australia.

6.3.2 Notional assessments

Context

Where a child support (1.1.C.60) agreement has been accepted by the Registrar, the Registrar also calculates the annual rate (1.1.A.70) of child support payable as if child support were to be payable under the applicable formula as opposed to the agreement. This is a notional assessment (1.1.N.20).

The notional assessment is used in the MIT when working out a person’s rate of FTB Part A. The way a notional assessment is applied to the MIT (FA Guide 3.1.7) depends on if the case has a private collect (1.1.P.110) arrangement or an agency collect (1.1.A.50) arrangement. More information about how notional assessments is used by the MIT is provided at FA Guide 3.1.7.14.

Act references

CSA Act Part 7A, section 124, section 125, section 146F, section 146B, section 146C, section 44, section 66A, section 146D, section 98B, section 146G, section 5, section 146K, section 146H, section 80, section 146A, section 146E

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Background

Notional assessments are required for most child support agreements, as well as certain orders made by a court where the annual rate of child support is to be reduced in accordance with an order that child support be provided in a form otherwise than in periodic amounts (1.1.P.80).

Provisional notional assessments (1.1.P.140)

Once the Registrar has decided to accept a child support agreement, a provisional notional assessment must be made. This provisional notional assessment will be calculated using both parents' (1.1.P.10) ATI (1.1.A.20) and the most recent care (1.1.C.10) details for the children available to the Registrar (CSA Act section 146B(2)).

In making the provisional notional assessment the Registrar must take into account any relevant change of assessment (1.1.C.50) decision and also any departure order made by a court (CSA Act section 146B(2)).

The Registrar must serve notice, in writing, of the provisional notional assessment on both parties. The notice will advise the parties they are entitled to seek a variation of the provisional notional assessment (CSA Act section 146B(5)).

Varying a provisional notional assessment

If a parent feels that a provisional notional assessment does not reflect their circumstances, they may seek a variation of the provisional notional assessment (CSA Act section 146C) within 14 days of receiving the notice by doing one or more of the following:

  • Making an application to exclude additional income earned post separation (3.5) (CSA Act section 44 and section 146C(1)(aa)).
  • Making an application to reduce the annual notional assessment rate to nil (2.3.4) (CSA Act section 66A and section 146C(1)(ab)).
  • Notifying the Registrar of a change to the percentage of care (1.1.P.70) that a party has of the child/ren (CSA Act section 146C(1)(a)).
  • Making an application for a change of assessment to the Registrar, where relevant special circumstances exist to depart from the provisional notional assessment (CSA Act section 146D and Part 6A).
    Note: The Families, Housing, Community Services and Indigenous Affairs and Other Legislation Amendment (Further 2008 Budget and Other Measures) Act 2008 amended CSA Act section 146D to provide that where a child support agreement is accepted by the Registrar after a departure application is made under CSA Act section 98B but before the departure application has been determined, the departure application is taken to be an application for a variation of the provisional notional assessment. This provision took effect from 6 January 2009 and applies to agreements accepted on or after 6 January 2009.
  • If the applicant is a parent of the relevant child, making an election to estimate (3.4) their ATI (CSA Act section 146G). The parent may make an election if he or she estimates that their ATI for the 12 months from the date of the provisional notional assessment will be at least 15% less than the ATI used in the provisional notional assessment. The ATI used in the provisional notional assessment can be one issued by the ATO or one based on a declaration made by the parent that the Registrar is satisfied is correct.
    Note: A parent may not elect to use an estimate of income where an income amount order (1.1.I.10) (CSA Act section 5) is in force, other than the relevant child support agreement, in relation to the parent and the particular period of time relevant to the provisional notional assessment (CSA Act section 146G(2)).

At any time before the provisional notional assessment becomes a notional assessment, a parent who made an election to estimate may revoke that election and substitute a new election (CSA Act section 146K).

The Registrar may refuse to accept the estimate election if it is likely to be less than the actual amount that would be the parent's ATI for that 12-month period (CSA Act section 146H).

A parent may not object to the Registrar varying, or refusing to vary, a provisional notional assessment. Instead, once the provisional notional assessment becomes a notional assessment, a parent can object (10.2.2) to the particulars of the notional assessment (CSRC Act section 80(1) item 14A).

Multiple provisional notional assessments

In some circumstances where both parents have requested a new provisional notional assessment and then sought to vary those assessments, more than one provisional notional assessment can exist at the same time. All variations to all provisional notional assessments must be finalised before a provisional notional assessment can become a notional assessment.

Example: George and Gladys have a limited child support agreement. George requests a new provisional notional assessment and seeks a variation to reflect their new income by applying for a change of assessment.

While the change of assessment application is being considered, Gladys notifies a change in care of the children.

More than 14 days have passed since Gladys received notice of the new provisional notional assessment, so they are unable to seek a variation to this assessment. Gladys therefore requests a new provisional notional assessment, and then seeks a variation.

This second provisional notional assessment is varied to reflect the change in care. However, it is unable to be converted to a notional assessment while the change of assessment decision relating to the first provisional notional assessment is pending.

When the change of assessment decision is made, a new notional assessment is made that reflects both the change of assessment decision relating to George's income and the change in care.

Notional assessments

A provisional notional assessment becomes a notional assessment:

  • 14 days after the notice of the provisional notional assessment is received by all the parties, or
  • if an application for variation was lodged, then on the day on which the Registrar varies, or refuses to vary, the provisional notional assessment.

The notional assessment is the rate of child support that would have been payable but for the child support agreement (taking into account the relevant circumstances of a case, including change of assessment) (CSA Act section 146A).

The notional assessment amount is used in calculating the relevant amount of FTB Part A payable to the payee (1.1.P.30). However, prior to the notional assessment issuing, the child support amount payable under the agreement will be used in calculating the relevant amount of FTB Part A payable to the payee.

A notional assessment will apply to all child support agreements (other than lump sum payment provisions (1.1.L.60)), where the application for acceptance is received by the Registrar on or after 1 July 2008 (CSA Act section 146B).

The Registrar must serve written notice of the notional assessment on the parties (CSA Act section 146E). Either party may object (10.2.2) to the particulars of the notional assessment (CSRC Act section 80(1) item 14A). If aggrieved by the objection (1.1.O.10) decision they may then apply to the ART (1.1.A.40) for review of the objection decision (10.3.1).

Later provisional notional assessments

The Registrar must make a new provisional notional assessment in the following circumstances:

  • Three years after the most recent notional assessment relating to the agreement was made
  • On the request of either party (only if the relevant agreement is a limited child support agreement)
  • If the amount of child support payable for a day under the relevant agreement or order changes by more than 15% from the previous day

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