3.1.6.55 Child support case ended - payer not a parent of the child
Background
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 CSA Act 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 CSA Act section 151 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: CSA Act section 107 Declaration that a person should not be assessed in respect of the costs of the child, section 151 Election to end administrative assessment
Effect on the payee's entitlement to FTB
Where a court decision under the CSA Act section 107 is made, this effectively removes the payer's liability to pay child support. However, the amount of child support paid may still be considered maintenance income if the payer is a partner or former partner of a parent of the child (owing to the legislative definition of maintenance income in the FA Act).
If a child support case is retrospectively ended or retrospectively made invalid because the payer is no longer considered to be a parent of the child, consideration needs to be given to whether the payer is considered to be a partner or former partner of a parent of the child and whether the payee has to repay the money.
If the payer is not a partner or former partner, the amounts paid are not considered maintenance income and should be removed from the maintenance income test (MIT) (even if the payee is not required to repay any money). 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.
If the payer is a partner or former partner and a court decision under section 143 is made (because of a decision under section 107), which requires the payee to repay the money, the payee will incur a child support overpayment. In this situation, the child support payments paid to the payee cannot be considered as maintenance income for FTB purposes and should be removed from the MIT. 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.
If the payer is a partner or former partner and the payee is not required to repay any of the money to the payer, the amounts received should be considered as maintenance income and assessed under the MIT (unless or until such a time as the money is repaid).
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 MAT.
Act reference: FAAct section 3(1)-'maintenance income'
FA(Admin)Act section 109D(2) Exception-Secretary may extend time limits in special circumstances
Policy reference: FA Guide 3.1.5.40 Maintenance action in progress, 3.1.5.70 Exemptions from the maintenance action test, 3.1.5.50 Reasonable maintenance action completed - Child Support collect, 3.1.5.55 Reasonable maintenance action completed - private collect
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, the amounts paid can no longer be classed as DCME. 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 ruling | Decision |
---|---|
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