3.1.7.15 Relevant period
Summary
This topic outlines the relevant period (1.1.R.25) as it applies to the assessment of maintenance income for the purposes of FTB. It covers:
- determining the relevant period
- determining the relevant period where bereavement or change of care occurs
- determining the relevant period where there is more than one payer
- start of the relevant period
- end of the relevant period, and
- treatment of gaps in the relevant period.
Determining the relevant period
Generally, the relevant period is the financial year for which FTB is being paid. However, if the individual has separated, reconciled, or gained an FTB child during the financial year, the relevant period is the period during which the individual is entitled to receive maintenance for an FTB child or children.
Example: Mary has one child from a previous relationship. She is receiving FTB payments for the child from 1 July. On 5 October Mary and the father of her child reconciled. The relevant period for Mary's entitlement to maintenance for her child in that financial year would be from 1 July to 4 October.
Note: The relevant period does not apply to capitalised maintenance income. Capitalised maintenance income is assessed separately.
Act reference: FAAct Schedule 1 clause 20A Annualised amount of maintenance income, Schedule 1 clause 24 Apportionment of capitalised maintenance income
Relevant period where bereavement or change of care occurs
Where an individual is entitled to receive maintenance in respect of only one FTB child, and that FTB child dies, the maintenance liability and therefore the relevant period ends on the date the FTB child died. Any child support received for the deceased child during or after the bereavement period does not extend the relevant period and the maintenance received is disregarded for the purpose of the maintenance income test.
Similarly, if there is an entitlement to maintenance in respect of only one FTB child and that FTB child leaves the care of the individual, the relevant period would end on the date the FTB child left care.
However, if there is an entitlement to maintenance from one payer in respect of more than one FTB child and one of the FTB children dies, the entitlement to maintenance continues for the other FTB child/ren in the child support case and the relevant period continues after the death of the child. Any maintenance received for the deceased child during the bereavement period is assessable under the maintenance income test. Any maintenance received for the deceased child after the end of the bereavement period is not assessable and is disregarded.
Similarly, if there is an entitlement to maintenance in respect of more than one FTB child and one of the FTB children leaves the care of the individual, the entitlement to maintenance continues for the other FTB child/ren, and the relevant period continues after the child left care.
Example: Joanne receives FTB for her 2 children, Wendy and Bob, who are from a previous relationship. Joanne has a private collect child support case in place from 1 July 2014, with an annual assessment of $9,648.00 for the 2 children ($4,824.00 per annum each). On 2 September 2014, Joanne advises that Wendy died on 30 August 2014. The 14 week bereavement period for Wendy starts on 30 August 2014 and finishes on 5 December 2014. Child Support advises Centrelink that the child support assessment amount for Bob has been amended from 30 August 2014 to $6,494.00 per annum. As Joanne is still entitled to receive maintenance for Bob, the relevant period continues and any maintenance received for Wendy during the bereavement period or prior to her death continues to be assessed under the maintenance income test. Therefore to determine the maintenance amount to be included in the maintenance income test during the relevant period we must first determine how much maintenance was deemed to be received before and after it was amended; i.e.
First part of relevant period: 1 July 2014 to 29 August 2014 is 60 days.
Maintenance received during first part:
Bob: $4,824.00 (annual assessment) ÷ 365 days = daily amount of $13.22 × 60 days = $792.99
Wendy: $4,824.00 (annual assessment) ÷ 365 days = daily amount of $13.22 × 60 days = $792.99
Total maintenance received during this period: $792.99 + $792.99 = $1,585.98
Second part of relevant period: 30 August 2014 to 30 June 2015 is 305 days.
Maintenance received during second part:
Bob: $6,494.00 (amended annual assessment) ÷ 365 days = daily amount of $17.79 × 305 days = $5,426.49
Wendy: deceased, no longer in the child support assessment
Total maintenance received during this period: $5,426.49
Therefore the total maintenance deemed to be received during the relevant period is:
First part ($1,585.98) + second part ($5,426.49) = $7,012.47.
The maintenance received during the relevant period then must be annualised (6.4.2.30) i.e.
$7,012.47 (maintenance income for the relevant period) × (365 (days in income year) ÷ 365 (days in relevant period)) = $7,012.47
Therefore, $7,012.47 is the maintenance income amount applied from 30 August 2014 to 30 June 2015 (pending any further changes). At reconciliation, the amount of $7,012.47 is applied to the full financial year (3.1.7.21).
Note: An individual continues to be eligible for FTB for a deceased FTB child for a period of 14 weeks from the day the child died. The individual is generally eligible for the same rate of FTB that would have been paid if the child had not died (3.1.1.40).
If the above child support case were registered for collection by Child Support and Joanne received arrears of child support for Wendy during the 14 week bereavement period (for example in November 2014), the arrears would be included in the maintenance income test. If the amount was received after the end of the bereavement period (for example in February 2015), the arrears would not be included in the maintenance income test.
More than one payer (1.1.P.72)
The relevant period applies in relation to the entitlement to receive maintenance from each payer for the relevant FTB child or children (1.1.M.23). Therefore, if an individual has children from more than one previous relationship, there will be a separate relevant period for each payer.
Example: Kylie has 2 children from 2 previous relationships. Kylie claimed FTB instalments from 1 July. On 3 September Kylie reconciled with Samantha, the other parent of her youngest child. Ben, the other parent of her oldest child died in an accident on 1 May the following calendar year. There are 2 relevant periods in that financial year for Kylie's entitlement to maintenance. These are for the period from 1 July to 2 September for the entitlement from Samantha, and for the period 1 July to 30 April for the entitlement from Ben.
Start of the relevant period
The relevant period generally begins at the start of the income (financial) year. However, if an event occurs after the start of the income (financial) year that creates an entitlement to maintenance, such as a separation, the relevant period starts from whichever is the earlier of when:
- an entitlement to maintenance begins under a formal liability, or
- voluntary maintenance (1.1.V.20) payments begin.
The relevant period relates to the assessed entitlement to maintenance, not the amount received. For example, if a payer has a nil assessment from Child Support, the relevant period commences from the date of the assessment.
Act reference: FAAct Schedule 1 clause 20A(3) Commencement of relevant period
End of the relevant period
The relevant period generally finishes at the end of the income (financial) year unless, before the end of that year:
- voluntary maintenance payments cease, or
- the entitlement to maintenance under the payer's liability ceases.
Note: If arrears of maintenance are received after the maintenance entitlement ceases (after the end of the relevant period) the arrears do not affect payment of FTB.
Act reference: FAAct Schedule 1 clause 20A(6) End of relevant period
Gaps in the relevant period
The number of days in a relevant period is not reduced by a gap between a period of voluntary maintenance and a period where a maintenance entitlement under a formal liability exists.
Example: John has paid Marie $400.00 voluntary maintenance in a period of 60 days followed by a gap of 40 days where no maintenance income is received and no maintenance liability exists. He then pays $600.00 maintenance income for a liability of 120 days.
The annualised maintenance income for the total of 220 days is:
$1,000.00 × (365 ÷ 220) = $1,659.09
The effect of this is to assess $1,659.09 over 220 days, rather than over 180 days which is:
$1,000.00 × (365 ÷ 180) = $2,027.77 over 180 days.