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2. This Ruling considers whether or not an order made as above can be registered under the Child Support (Registration and Collection) Act 1988 (the Registration and Collection Act). It also considers the extent to which the provisions of the Assessment Act might apply if such an order is registered.
4. Officers must consider the facts of each particular case and record the reasons for their decisions.
5. This Ruling has also been designed to give effect to the intention of the legislature in enacting the child support legislation and to the objects of the Child Support Scheme as stated in that legislation.
Registrable maintenance liability
6. An order which states that the liability is to be
determined by reference to the formula contained in the
Assessment Act will give rise to a periodic amount. Therefore, it gives
rise to a registrable maintenance liability provided that all the
information necessary to calculate the liability can be ascertained.
Orders which state that the Assessment Act or Part 5 of that Act is to
apply are not sufficiently specific to enable a periodic amount to be
determined with any certainty and so do not give rise to a registrable
maintenance liability. Similarly, an order which does not identify the
formula as the Assessment Act formula (for example, an order stating
that the payer pay such amount as is determined by the Child Support
Agency) does not give rise to a registrable maintenance
liability.
Application of the Assessment Act
7. The Registrar will apply the basic formula contained in
subsection 36(1) of the Assessment Act. The modifications to the formula
contained in Division 2 of Part 5 of the Assessment Act will not be
applied unless the court specifies which if any of these modifications
are to apply. In determining the child support income amount the
Registrar will multiply the person's last relevant year of income by the
inflation factor (if any) applicable to the child support year as
provided for in Division 3 of Part 5. However, the remaining provisions
Division 3 of Part 5 cannot apply.
8. The Registrar cannot reassess child support annually using the provisions of the Assessment Act unless the order specifically provides for this. If the order does not provide for periodic updating of the amount, the amount originally calculated remains payable whilst the order remains in force.
9. A party wishing to change his or her liability (for example, to accommodate a change in circumstances) must apply to the court for a variation to the order. This is consistent with all other cases where the liability has been determined by the court.
11. The issue raised by an order applying a formula is whether or not it gives rise to a periodic amount. A 'periodic amount' is defined in subsection 4(1) of the Registration and Collection Act as a weekly, monthly, yearly or other periodic amount. The amount which results from application of the child support formula satisfies this definition.
12. It is not necessary for an order to specify a dollar amount payable. However, if the order does not specify the amount payable, it must provide some mechanism for determining the periodic amount by reference to a set formula. It must either specify all the components of the formula or identify the formula to which it refers with sufficient clarity to ensure that only one formula could be used. An order which identifies the Assessment Act formula will satisfy this requirement.
13. To make the calculation pursuant to such an order, the Registrar requires access to taxable income details for the last relevant year of income. The Registrar can obtain this information from various sources, including the Australian Taxation Office taxation records, or the parties.
14. The Commissioner is authorised to disclose information about a person's income to the other party to the order under subsection 16(2) of the Registration and Collection Act, as the disclosure is for the purposes of that Act.
Application of the Assessment Act
15. The Assessment Act has no application to orders made
under the Family Law Act. It only applies where the eligibility
requirements under the Assessment Act are satisfied. A court order
cannot make the parties to it eligible for an assessment under the
Assessment Act if they are not eligible within the provisions of that
Act. An order which states that the amount payable is to be determined
by reference to that formula is not attempting to do this. It is
providing a mechanism for calculating the amount payable under the
Family Law Act. The Assessment Act will not, as a matter of law, have
any application to such a case.
16. In registering an order which applies the Assessment Act formula, the Registrar has not made an assessment under Part 5 of the Act. The Registrar has merely determined the liability by applying a formula which is contained in the Assessment Act. The liability has been determined according to the terms of the order and arises under the Family Law Act.
17. The only formula which is defined in the Assessment Act is the basic formula contained in subsection 36(1) of that Act. Division 2 of Part 5 of the Assessment Act provides for modifications to that basic formula in certain circumstances. An order which merely provides for application of the child support formula will be read as meaning the formula defined in subsection 36(1) of the Assessment Act. Unless otherwise specified, the following provisions of Division 2 of Part 5 will not apply:
* Liable parents with low child support income (section 41)
* Liable parents with high child support income (section 42)
* Carer parents with child support income of more than disregarded income amount (sections 43 to 46)
* Children shared or divided between parents (sections 47 to 49)
* Children with 2 liable parents (sections 50 to 52)
* Liable parents with 2 or more carers entitled to child support (sections 53 and 54).
If the court wishes to have these circumstances taken into account, the terms of the order must so specify.
18. The provisions of Division 3 of Part 5, with the exception of section 55, cannot be applied. This is because section 55 is a mechanical provision and forms part of the basic formula. However, the remainder of Division 3 relies on the exercise of particular rights (estimates) or functions (default incomes) that arise under the Assessment Act. These rights and functions cannot be imported into an order under the Family Law Act. If the court wishes the Agency to use current income, it can so specify in the order.
19. The Assessment Act provides a number of means for updating an administrative assessment either annually or upon a change in circumstances. However, as there has never been an administrative assessment under the Assessment Act, none of the means of varying an assessment under that Act will apply to court orders applying the formula. For example, subsection 98B(1) of the Assessment Act means that Part 6A applies only where an administrative assessment is in force. As there is no administrative assessment made when an order of this type is registered, it is not open to the parties to apply for the amount calculated to be changed using Part 6A.
5 March 1997
Previously released in draft form as CSR 96/D1
FOI index detail
reference number
I 1218294
ISSN 1034 - 6422
ATO References:
94/6077-2
93/5103-5
Subject References:
- Child Support Agency
- court orders
- periodic amount
- registrable maintenance liability
Legislative References:
- CSAA 4(1)
- CSAA 36(1)
- CSAA 41
- CSAA 42
- CSAA 43
- CSAA 44
- CSAA 45
- CSAA 46
- CSAA 47
- CSAA 48
- CSAA 49
- CSAA 50
- CSAA 51
- CSAA 52
- CSAA 53
- CSAA 54
- CSAA 55
- CSAA 98B(1)
- CSAA Pt 5
- CSAA Pt 5, Div 2
- CSAA Pt 5, Div 3
- CSAA Part 6A
- CSRCA 4(1)
- CSRCA 16(2)
- CSRCA 17(1)