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Child Support and Family Assistance Legislation Amendment (Budget and Other Measures) Bill 2010

Schedule 1 Child support income estimates

Part 1 Amendments

Child Support (Assessment) Act 1989

1  Subsection 5(1) (at the end of the definition of adjusted taxable income )

Add “and subsections 61(1) and 63(1)”.

2  Subsection 5(1)

Insert:

applicable YTD income amount has the meaning given by subsections 63AF(1) and (2).

3  Subsection 5(1)

Insert:

application period has the meaning given by:

                     (a)  for an election made under subsection 60(1)—subsection 61(1A); and

                     (b)  for an election made under subsection 62A(1)—subsection 63(2).

4  Subsection 5(1)

Insert:

determined ATI has the meaning given by paragraph 64AB(2)(a).

5  Subsection 5(1)

Insert:

estimated ATI amount has the meaning given by subsections 64A(3) and 64AD(3).

6  Subsection 5(1)

Insert:

income component amounts has the meaning given by subsection 60(2).

7  Subsection 5(1)

Insert:

income election means an election made under subsection 60(1) or 62A(1).

8  Subsection 5(1)

Insert:

partial year income amount has the meaning given by:

                     (a)  for an election made under subsection 60(1) to which subsection 60(3) applies—step 2 of the method statement in subsection 60(4); and

                     (b)  for an election made under subsection 62A(1)—step 2 of the method statement in that subsection.

9  Subsection 5(1) (definition of remaining period )

Repeal the definition, substitute:

remaining period has the meaning given by:

                     (a)  for an election made under subsection 60(1) to which subsection 60(3) applies—step 1 of the method statement in subsection 60(4); and

                     (b)  for an election made under subsection 62A(1)—step 1 of the method statement in that subsection.

10  Subsection 5(1)

Insert:

start day for an income election means the day specified in the notice of the income election under subsection 60(8) or 62A(5) as the start day for the income election.

11  Subsection 5(1)

Insert:

underestimated an income amount has the meaning given by subsections 64AF(2) and (3).

12  Subsection 43(1)

Omit “subsection (2)”, substitute “this Part”.

13  Paragraph 44(1)(d)

Omit “remaining period (if the parent has made an election under section 60)”, substitute “application period for an income election (if such an election has been made by the parent)”.

14  Section 55J

Omit:

•      A parent can estimate the amount of his or her adjusted taxable income for days in a child support period.

Substitute:

•      A parent can estimate the amount of his or her adjusted taxable income for a year of income.

15  Paragraphs 56(2)(d) and 57(7)(b)

Omit “subsection 60(3)”, substitute “paragraph 60(1)(b)”.

16  Subdivision C of Division 7 of Part 5 (heading)

Repeal the heading, substitute:

Subdivision C Child support income determined by reference to parent’s estimate of adjusted taxable income

17  Sections 60 to 60B

Repeal the sections, substitute:

60   Parent may elect to estimate his or her adjusted taxable income for a year of income

             (1)  A parent may, before a year of income starts or during a year of income, elect that the parent’s adjusted taxable income for the year of income is to be the amount that applies under subsection (2) or (3) if:

                     (a)  the parent is to be assessed in respect of the costs of a child of the parent for a day in a child support period; and

                     (b)  the amount that would apply under that subsection is not more than 85% of:

                              (i)  the total of the parent’s adjusted taxable income determined in accordance with section 43 for the last relevant year of income for the child support period; or

                             (ii)  an amount that the parent declares is the total of the parent’s adjusted taxable income for the last relevant year of income for the child support period, and the Registrar is satisfied that the declared amount is correct.

Estimate for a whole year of income

             (2)  If the parent makes the election under subsection (1) before the year of income starts or on the first day of the year of income, the amount is the total of the following amounts (the income component amounts ) as estimated by the parent:

                     (a)  the parent’s taxable income for the year;

                     (b)  the parent’s reportable fringe benefits total for the year;

                     (c)  the parent’s target foreign income for the year;

                     (d)  the parent’s total net investment loss (within the meaning of the Income Tax Assessment Act 1997 ) for the year;

                     (e)  the total of the tax free pensions or benefits received by the parent in the year;

                      (f)  the parent’s reportable superannuation contributions (within the meaning of the Income Tax Assessment Act 1997 ) for the year.

Estimate for a part of a year of income etc.

             (3)  If the parent makes the election under subsection (1) during the year of income but not on the first day of the year of income:

                     (a)  the parent is to use the method in subsection (4) to work out the amount; and

                     (b)  the parent is to estimate each income component amount for the parent for the period that:

                              (i)  started on the first day of the year of income; and

                             (ii)  ended at the end of the day before the start day for the election.

             (4)  For the purposes of paragraph (3)(a), the method is as follows:

Method statement

Step 1.   Estimate each income component amount for the parent for the period (the remaining period ):

               (a)     starting on the start day for the election; and

              (b)     ending at the end of the last day of the year of income.

Step 2.   Add up those amounts. The result is the partial year income amount .

Step 3.   Divide the partial year income amount by the number of days in the remaining period.

Step 4.   Multiply the quotient by 365.

             (5)  The start day for the election must be:

                     (a)  the day on which the parent makes the election; or

                     (b)  the first day of a child support period, so long as that day is not before the day referred to in paragraph (a).

No election if an income amount order is in force

             (6)  Despite subsection (1), a parent may not make an election if an income amount order is in force in relation to:

                     (a)  the parent; and

                     (b)  if the parent were to make such an election—any part of the period that would be the application period for the election.

How election is made

             (7)  The parent makes the election under subsection (1) by giving notice of it to the Registrar in the manner specified by the Registrar.

             (8)  The notice must specify:

                     (a)  the amount that applies under subsection (2) or (3); and

                     (b)  if subsection (2) applies—each of the income component amounts estimated by the parent under that subsection; or

                     (c)  if subsection (3) applies:

                              (i)  the day that is the start day for the election; and

                             (ii)  each of the income component amounts estimated by the parent under paragraph (3)(b) and under step 1 of the method statement in subsection (4).

18  Subsection 61(1)

Repeal the subsection, substitute:

             (1)  If:

                     (a)  a parent makes an election under subsection 60(1) relating to a year of income; and

                     (b)  the parent is to be assessed in respect of the costs of a child of the parent for a day in a child support period; and

                     (c)  the day occurs in the application period for the election;

then, for the purposes of so assessing the parent, the parent’s adjusted taxable income is the amount that applies under subsection 60(2) or 60(3).

          (1A)  The application period for an election under subsection 60(1) relating to a year of income is the period that:

                     (a)  starts:

                              (i)  if the parent made the election before the year of income started or on the first day of the year of income—on the first day of that year of income; or

                             (ii)  otherwise—on the start day for the election;

                            unless the election is revoked before that day; and

                     (b)  ends:

                              (i)  at the end of the last day of that year of income; or

                             (ii)  if the parent revokes the election before that day and makes another election (the later election ) under subsection 62A(1) relating to the year of income—at the end of the day before the start day for the later election.

19  Subsection 61(2)

Omit “child support period”, substitute “application period for the election”.

20  Subsections 61(3) and (4)

Omit “and the child support period”.

21  Subsection 62(1)

Repeal the subsection, substitute:

             (1)  A parent who has made an income election relating to a year of income may, by notice given to the Registrar, revoke the income election.

Note:          If the application period for the income election has started, the parent must make a new election under subsection 62A(1).

Note:       The heading to section 62 is altered by inserting “ income ” before “ election ”.

22  Subsection 62(3)

Repeal the subsection.

23  After section 62

Insert:

62A   Parent must elect a new estimate of his or her adjusted taxable income for a year of income

             (1)  If:

                     (a)  under subsection 62(1), a parent revokes an income election (the earlier election ) relating to a year of income; and

                     (b)  at the time of the revocation, the application period for the earlier election has started;

the parent must elect that the parent’s adjusted taxable income for the year of income is to be the amount the parent works out as follows:

Method statement

Step 1.   Estimate each income component amount for the parent for the period (the remaining period ):

               (a)     starting on the start day for the election made under this subsection; and

              (b)     ending at the end of the last day of the year of income.

Step 2.   Add up those amounts. The result is the partial year income amount .

Step 3.   Divide the partial year income amount by the number of days in the remaining period.

Step 4.   Multiply the quotient by 365.

Start day

             (2)  Subject to subsection (3), the start day for the election under subsection (1) must be the day on which the parent makes that election.

             (3)  If:

                     (a)  an event affecting the accuracy of an estimate on which the earlier election is based has occurred; and

                     (b)  the amount that would be worked out under subsection (1) for an election under that subsection if the start day for that election was the day on which the event occurred is more than:

                              (i)  if subsection 60(2) or (3) applied to the earlier election—the amount that applied under that subsection; or

                             (ii)  if the earlier election was made under subsection (1) of this section—the amount worked out under that subsection;

the start day for the election under subsection (1) of this section must be the day on which the event occurred.

How election is made

             (4)  The parent makes the election under subsection (1) by giving notice of it to the Registrar in the manner specified by the Registrar.

             (5)  The notice must specify:

                     (a)  the amount worked out under subsection (1); and

                     (b)  the day that is the start day for the election under that subsection; and

                     (c)  each of the income component amounts estimated by the parent under step 1 of the method statement in that subsection.

24  Subsections 63(1) and (2)

Repeal the subsections, substitute:

             (1)  If:

                     (a)  a parent makes an election under subsection 62A(1) relating to the year of income; and

                     (b)  the parent is to be assessed in respect of the costs of a child of the parent for a day in a child support period; and

                     (c)  the day occurs in the application period for the election;

then, for the purposes of so assessing the parent, the parent’s adjusted taxable income is the amount worked out under that subsection.

             (2)  The application period for an election under subsection 62A(1) relating to a year of income is the period that:

                     (a)  starts on the start day for the election unless the election is revoked before that day; and

                     (b)  ends:

                              (i)  at the end of the last day of the year of income; or

                             (ii)  if the parent revokes the election before that day and makes another election (the later election ) under subsection 62A(1) relating to the year of income—at the end of the day before the start day for the later election.

          (2A)  Subsection (1) has effect subject to an income amount order that applies in relation to the parent and any part of the application period for the later election.

Note:       The heading to section 63 is altered by omitting “ revocation ” and substituting “ later election ”.

25  Subsection 63(3)

Omit “and any part of the child support period”.

26  Subsection 63(4)

Omit “section 60”, substitute “subsection 62A(1)”.

27  Subsection 63(4)

Omit “and the child support period”.

28  After section 63

Insert:

63AA   Registrar may refuse to accept an income election

             (1)  If:

                     (a)  a parent makes an income election to which subsection 60(2) applies; and

                     (b)  the Registrar is satisfied that the amount worked out under that subsection is less than the amount that the Registrar considers is likely to be the parent’s actual adjusted taxable income for the year of income to which the income election relates;

the Registrar may refuse to accept the income election.

             (2)  The Registrar may refuse to accept a parent’s income election to which subsection 60(3) applies if the Registrar is satisfied that:

                     (a)  the partial year income amount for the income election is less than the amount that the Registrar considers is likely to be the parent’s actual adjusted taxable income for the remaining period in relation to the income election; or

                     (b)  the total of the income component amounts estimated by the parent under paragraph 60(3)(b) for the period referred to in that paragraph is more than the amount that the Registrar considers is likely to be the total of the actual income component amounts for the parent for that period.

             (3)  If:

                     (a)  a parent makes an election under subsection 62A(1); and

                     (b)  the Registrar is satisfied that the partial year income amount for the income election is less than the amount that the Registrar considers is likely to be the parent’s actual adjusted taxable income for the remaining period in relation to the income election;

the Registrar may refuse to accept the income election.

             (4)  In making the decision as to whether to refuse to accept the income election, the Registrar:

                     (a)  may act on the basis of information that the Registrar has received or obtained as to the financial circumstances of the parent; and

                     (b)  may, but is not required to, conduct an inquiry into the matter.

             (5)  Except for the purposes of Parts VII, VIIA and VIII of the Registration and Collection Act (dealing with objections and appeals), if the Registrar refuses to accept the income election, the election is taken never to have been made.

63AB   Notice to be given if Registrar refuses to accept an income election

             (1)  If the Registrar refuses under section 63AA to accept an income election, the Registrar must give written notice of the decision to the parent who sought to make the income election.

             (2)  The notice must include, or be accompanied by, a statement to the effect:

                     (a)  that the parent may, subject to the Registration and Collection Act, object to the particulars of the assessment in relation to which the parent sought to make the income election; and

                     (b)  that if the parent is aggrieved by the decision on the objection, he or she may, subject to that Act, apply to the SSAT for review of the decision.

             (3)  A contravention of subsection (2) in relation to a decision does not affect the validity of the decision.

Subdivision D Year to date income amounts

63AC   Parent may elect a new year to date income amount

             (1)  If:

                     (a)  either of the following apply:

                              (i)  a parent has made an election relating to a year of income under subsection 60(1) to which subsection 60(3) applies;

                             (ii)  a parent has made an election in relation to a year of income under this subsection; and

                     (b)  the parent becomes satisfied that the following amount (the year to date income amount ) is incorrect:

                              (i)  if subparagraph (a)(i) applies—the total of the income component amounts estimated by the parent under paragraph 60(3)(b);

                             (ii)  if subparagraph (a)(ii) applies—the amount specified under paragraph (3)(a) of this section in the notice of the election; and

                     (c)  sections 64, 64A, 64AC and 64AD do not apply in relation to the parent;

the parent may elect another amount (the new amount ) to replace the year to date income amount for the year of income.

             (2)  The parent makes the election under subsection (1) by giving notice of it to the Registrar in the manner specified by the Registrar.

             (3)  The notice must specify:

                     (a)  the new amount; and

                     (b)  the parent’s estimate of each income component amount for the period referred to in paragraph 60(3)(b).

63AD   Registrar may refuse to accept an election of a new year to date income amount

Refusal to accept election

             (1)  The Registrar may refuse to accept an election made by a parent under subsection 63AC(1) if the Registrar is satisfied that the amount specified under paragraph 63AC(3)(a) in the notice of the election is more than the amount that the Registrar considers is likely to be the total of the actual income component amounts for the parent for the period referred to in paragraph 60(3)(b).

             (2)  In making the decision as to whether to refuse to accept the election, the Registrar:

                     (a)  may act on the basis of information that the Registrar has received or obtained as to the financial circumstances of the parent; and

                     (b)  may, but is not required to, conduct an inquiry into the matter.

             (3)  Except for the purposes of Parts VII, VIIA and VIII of the Registration and Collection Act (dealing with objections and appeals), if the Registrar refuses to accept the election, the election is taken never to have been made.

Notice of refusal

             (4)  If the Registrar refuses under subsection (1) to accept a parent’s election made under subsection 63AC(1), the Registrar must give written notice of the decision to the parent.

             (5)  The notice must include, or be accompanied by, a statement to the effect:

                     (a)  that the parent may, subject to the Registration and Collection Act, object to the decision (the original decision ); and

                     (b)  that if the parent is aggrieved by a later decision on the objection to the original decision, he or she may, subject to that Act, apply to the SSAT for review of the later decision.

             (6)  A contravention of subsection (5) in relation to a decision does not affect the validity of the decision.

63AE   Registrar may determine a new year to date income amount

             (1)  If:

                     (a)  any of the following apply:

                              (i)  a parent has made an election relating to a year of income under subsection 60(1) to which subsection 60(3) applies;

                             (ii)  a parent has made an election in relation to a year of income under subsection 63AC(1);

                            (iii)  the Registrar has made a determination under this subsection in relation to a parent and a year of income; and

                     (b)  the Registrar becomes satisfied that the following amount (the year to date income amount ) is incorrect:

                              (i)  if subparagraph (a)(i) applies—the total of the income component amounts estimated by the parent under paragraph 60(3)(b);

                             (ii)  if subparagraph (a)(ii) applies—the amount specified under paragraph 63AC(3)(a) in the notice of the election;

                            (iii)  is subparagraph (a)(iii) applies—the amount specified in the determination;

the Registrar may determine another amount to replace the year to date income amount for the year of income.

             (2)  If the Registrar makes a determination in relation to a parent under subsection (1), the Registrar must give written notice of the determination to the parent.

             (3)  The notice must include, or be accompanied by, a statement to the effect:

                     (a)  that the parent may, subject to the Registration and Collection Act, object to the determination; and

                     (b)  that if the parent is aggrieved by the decision on the objection, he or she may, subject to that Act, apply to the SSAT for review of the decision.

             (4)  A contravention of subsection (3) in relation to a determination does not affect the validity of the determination.

63AF   Parent’s applicable YTD income amount

             (1)  If:

                     (a)  a parent has made an election relating to a year of income under subsection 60(1) to which subsection 60(3) applies; and

                     (b)  subsection (2) of this section does not apply in relation to the parent;

the total of the income component amounts estimated by the parent under paragraph 60(3)(b) is the parent’s applicable YTD income amount for that year.

             (2)  If either or both of the following have occurred:

                     (a)  a parent has made one or more elections in relation to a year of income under subsection 63AC(1);

                     (b)  the Registrar has made one or more determinations under subsection 63AE(1) in relation to a parent and a year of income;

the parent’s applicable YTD income amount for the year of income is:

                     (c)  the amount specified under paragraph 63AC(3)(a) in the notice of such an election, if that election was the last of those elections or determinations to be made; or

                     (d)  the amount determined in such a determination, if that determination was the last of those elections or determinations to be made.

Subdivision E Amendment of assessments

29  Paragraph 63A(1)(a)

Repeal the paragraph, substitute:

                     (a)  those days occur in the application period for an income election that the parent has made; and

Note:       The heading to section 63A is altered by inserting “ income ” before “ election ”.

30  Subsection 63A(2)

Omit “the days”, substitute “those days”.

31  Subsection 63A(2)

After “period”, insert “that occur”.

32  Subsection 63A(3)

Omit “the days”, substitute “those days”.

33  Subsection 63A(3)

After “period”, insert “that occur”.

34  Paragraph 63B(1)(a)

Repeal the paragraph, substitute:

                     (a)  those days occur in the application period for an income election that the parent has made; and

Note:       The heading to section 63B is altered by inserting “ income ” before “ election ”.

35  Subsection 63B(2)

Omit “the days”, substitute “those days”.

36  Subsection 63B(2)

After “period”, insert “that occur”.

37  Subsection 63B(3)

Omit “the days”, substitute “those days”.

38  Subsection 63B(3)

After “period”, insert “that occur”.

39  Paragraph 63B(3)(a)

Before “election”, insert “income”.

40  Subparagraph 63B(3)(b)(i)

Before “election”, insert “income”.

41  Paragraph 63C(1)(a)

Repeal the paragraph, substitute:

                     (a)  those days occur in the application period for an income election that the parent has made; and

42  Paragraph 63C(1)(b)

Before “period”, insert “application”.

43  Paragraph 63C(1)(c)

Omit “the days in the period”, substitute “those days”.

44  Subsection 63C(2)

Omit “the days in the child support period”, substitute “those days”.

45  Sections 64 and 64A

Repeal the sections, substitute:

Division 7A Reconciliation of estimates of adjusted taxable income

Subdivision A Reconciliation using a parent’s actual adjusted taxable income

64   Reconciliation using a parent’s actual adjusted taxable income—single income election

             (1)  This section applies for the purposes of assessing a parent in relation to the costs of a child of the parent for a day in a child support period if:

                     (a)  the day occurs in the application period for an income election relating to a year of income that was made by the parent; and

                     (b)  the parent did not make more than one income election relating to the year of income; and

                     (c)  the parent’s actual adjusted taxable income for the year of income has been ascertained by the Registrar; and

                     (d)  if the Registrar has made a determination under subsection 64AB(1) in relation to the parent—the parent’s actual adjusted taxable income for the year of income is more than the parent’s determined ATI for that year; and

                     (e)  if, under section 63A, 63B or 63C, the Registrar has amended an assessment of child support payable by or to the parent—the Registrar determines that this section should apply in relation to the parent.

Reconciliation—election for a whole year of income

             (2)  Subject to this section, if:

                     (a)  subsection 60(2) applied to the income election; and

                     (b)  the parent’s actual adjusted taxable income for the year of income is more than the amount that applied under that subsection;

the parent’s adjusted taxable income for that year is taken to be, and to have always been, the parent’s actual adjusted taxable income for that year.

Reconciliation—election for a part of a year of income

             (3)  Subject to this section, if:

                     (a)  subsection 60(3) applied to the income election; and

                     (b)  the difference between:

                              (i)  the parent’s actual adjusted taxable income for the year of income; and

                             (ii)  the parent’s applicable year to date income amount for the year of income;

                            is more than the partial year income amount worked out by the parent under subsection 60(4);

the parent’s adjusted taxable income for a day that occurs in the application period for the income election is taken to be, and to have always been, the amount worked out under subsection (4).

             (4)  For the purposes of subsection (3), the amount is worked out by:

                     (a)  dividing the amount worked out under paragraph (3)(b) by the number of days in the remaining period to which the income election related; and

                     (b)  multiplying the quotient by 365.

Income amount orders

             (5)  This section does not apply if an income amount order applies in relation to the parent and any part of the application period for the income election.

64A   Reconciliation using a parent’s actual adjusted taxable income—more than one income election

             (1)  This section applies for the purposes of assessing a parent in relation to the costs of a child of the parent for a day in a child support period if:

                     (a)  the day occurs in the application period for an income election relating to a year of income that was made by the parent; and

                     (b)  the parent made more than one income election relating to the year of income; and

                     (c)  the parent’s actual adjusted taxable income for the year of income has been ascertained by the Registrar; and

                     (d)  if the Registrar has made a determination under subsection 64AB(1) in relation to the parent—the parent’s actual adjusted taxable income for the year of income is more than the parent’s determined ATI for that year; and

                     (e)  if, under section 63A, 63B or 63C, the Registrar has amended an assessment of child support payable by or to the parent—the Registrar determines that this section should apply in relation to the parent.

Reconciliation

             (2)  Subject to this section, if the difference (the actual ATI amount ) between:

                     (a)  the parent’s actual adjusted taxable income for the year of income; and

                     (b)  the parent’s applicable year to date income amount (if any) for the year of income;

is more than the parent’s estimated ATI amount for the year of income, then the parent’s adjusted taxable income for a day that occurs in the application period of each income election made by the parent is taken to be, and to have always been, the amount worked out for that income election using the method in subsection (4).

Estimated ATI amount

             (3)  The parent’s estimated ATI amount for the year of income is worked out using the following method:

Method statement

Step 1.   For each income election relating to the year of income that had an application period that ended before the last day of the year of income:

               (a)     if subsection 60(2) applied to the income election—divide the amount that applied under that subsection by 365; or

              (b)     otherwise—divide the partial year income amount worked out under subsection 60(4) or 62A(1) by the number of days in the remaining period to which the income election related.

Step 2.   For each of those income elections, multiply the result of step 1 by the number of days in the application period for the income election.

Step 3.   Add up each of the amounts worked out under step 2.

Step 4.   Add the result of step 3 and the partial year income amount worked out under subsection 62A(1) for the last income election relating to the year of income that was made by the parent.

Amount for the purposes of subsection (2)

             (4)  For the purposes of subsection (2), the amount for each income election is worked out using the following method:

Method statement

Step 1.   Subtract the parent’s estimated ATI amount from the parent’s actual ATI amount.

Step 2.   Divide the result by the total number of days in the application periods for each income election relating to the year of income that was made by the parent. The result is the additional daily rate .

Step 3.   For each of those income elections, multiply the additional daily rate by the number of days in the application period for the income election. The result is the underestimated amount for the income election.

Step 4.   For each of those income elections, add the underestimated amount for the income election and:

               (a)     if the income election had an application period that ended before the last day of the year of income—the amount worked out for the income election under step 2 of the method statement in subsection (3); or

              (b)     otherwise—the partial year income amount worked out under subsection 62A(1) for the income election.

Step 5.   For each of those income elections:

               (a)     divide the result of step 4 by the number of days in the application period for the income election; and

              (b)     multiply the quotient by 365.

Income amount orders

             (5)  This section does not apply if an income amount order applies in relation to the parent and any part of an application period for any of the income elections.

64AA   Action by Registrar following reconciliation

                   The Registrar is to take such action as is necessary to give effect to section 64 or 64A in relation to a parent (whether by amending any administrative assessment that has been made in relation to the parent or otherwise).

Subdivision B Reconciliation using a parent’s determined ATI

64AB   Registrar to determine a parent’s adjusted taxable income for the purposes of reconciliation

             (1)  If:

                     (a)  a parent made an income election relating to a year of income; and

                     (b)  at the end of the period ending 12 months after the end of the year of income, the Registrar has not ascertained the parent’s actual adjusted taxable income for that year;

the Registrar may determine that an amount that the Registrar considers appropriate is the parent’s adjusted taxable income for that year for the purposes of this Subdivision.

             (2)  If the Registrar makes a determination under subsection (1) in relation to a parent:

                     (a)  the amount determined is the parent’s determined ATI for the year of income; and

                     (b)  the Registrar must give notice of the determination to the parent.

             (3)  The notice must include, or be accompanied by, a statement to the effect:

                     (a)  that the parent may, subject to the Registration and Collection Act, object to the particulars of the assessment to which the determination relates; and

                     (b)  that if the parent is aggrieved by the decision on the objection, he or she may, subject to that Act, apply to the SSAT for review of the decision.

             (4)  A contravention of subsection (3) in relation to a determination does not affect the validity of the determination.

64AC   Reconciliation using a parent’s determined ATI—single income election

             (1)  This section applies for the purposes of assessing a parent in relation to the costs of a child of the parent for a day in the child support period if:

                     (a)  the day occurs in the application period for an income election relating to a year of income that was made by the parent; and

                     (b)  the parent did not make more than one income election relating to the year of income; and

                     (c)  the Registrar makes a determination under subsection 64AB(1) in relation to the parent; and

                     (d)  if, under section 63A, 63B or 63C, the Registrar has amended an assessment of child support payable by or to the parent—the Registrar determines that this section should apply in relation to the parent.

Reconciliation—election for a whole year of income

             (2)  Subject to this section, if:

                     (a)  subsection 60(2) applied to the income election; and

                     (b)  the parent’s determined ATI for the year of income is more than the amount that applied under that subsection;

the parent’s adjusted taxable income for that year is taken to be, and to have always been, the parent’s determined ATI for that year.

Reconciliation—election for a part of a year of income

             (3)  Subject to this section, if:

                     (a)  subsection 60(3) applied to the income election; and

                     (b)  the difference between:

                              (i)  the parent’s determined ATI for the year of income; and

                             (ii)  the parent’s applicable year to date income amount for the year of income;

                            is more than the partial year income amount worked out by the parent under subsection 60(4);

the parent’s adjusted taxable income for a day that occurs in the application period for the income election is taken to be, and to have always been, the amount worked out under subsection (4).

             (4)  For the purposes of subsection (3), the amount is worked out by:

                     (a)  dividing the amount worked out under paragraph (3)(b) by the number of days in the remaining period to which the income election related; and

                     (b)  multiplying the quotient by 365.

Income amount orders

             (5)  This section does not apply if an income amount order applies in relation to the parent and any part of the application period for the income election.

64AD   Reconciliation using a parent’s determined ATI—more than one income election

             (1)  This section applies for the purposes of assessing a parent in relation to the costs of a child of the parent for a day in a child support period if:

                     (a)  the day occurs in the application period for an income election relating to a year of income that was made by the parent; and

                     (b)  the parent made more than one income election relating to the year of income; and

                     (c)  the Registrar makes a determination under subsection 64AB(1) in relation to the parent; and

                     (d)  if, under section 63A, 63B or 63C, the Registrar has amended an assessment of child support payable by or to the parent—the Registrar determines that this section should apply in relation to the parent.

Reconciliation

             (2)  Subject to this section, if the difference (the actual ATI amount ) between:

                     (a)  the parent’s determined ATI for the year of income; and

                     (b)  the parent’s applicable year to date income amount (if any) for the year of income;

is more than the parent’s estimated ATI amount for the year of income, then the parent’s adjusted taxable income for a day that occurs in the application period of each income election made by the parent is taken to be, and to have always been, the amount worked out for that income election using the method in subsection (4).

Estimated ATI amount

             (3)  The parent’s estimated ATI amount for the year of income is worked out using the following method:

Method statement

Step 1.   For each income election relating to the year of income that had an application period that ended before the last day of the year of income:

               (a)     if subsection 60(2) applied to the income election—divide the amount that applied under that subsection by 365; or

              (b)     otherwise—divide the partial year income amount worked out under subsection 60(4) or 62A(1) by the number of days in the remaining period to which the income election related.

Step 2.   For each of those income elections, multiply the result of step 1 by the number of days in the application period for the income election.

Step 3.   Add up each of the amounts worked out under step 2.

Step 4.   Add the result of step 3 and the partial year income amount worked out under subsection 62A(1) for the last income election relating to the year of income that was made by the parent.

Amount for the purposes of subsection (2)

             (4)  For the purposes of subsection (2), the amount for each income election is worked out using the following method:

Method statement

Step 1.   Subtract the parent’s estimated ATI amount from the parent’s determined ATI.

Step 2.   Divide the result by the total number of days in the application periods for each income election relating to the year of income that was made by the parent. The result is the additional daily rate .

Step 3.   For each of those income elections, multiply the additional daily rate by the number of days in the application period for the income election. The result is the underestimated amount for the income election.

Step 4.   For each of those income elections, add the underestimated amount for the income election and:

               (a)     if the income election had an application period that ended before the last day of the year of income—the amount worked out for the income election under step 2 of the method statement in subsection (3); or

              (b)     otherwise—the partial year income amount worked out under subsection 62A(1) for the income election.

Step 5.   For each of those income elections:

               (a)     divide the result of step 4 by the number of days in the application period for the income election; and

              (b)     multiply the quotient by 365.

Income amount orders

             (5)  This section does not apply if an income amount order applies in relation to the parent and any part of an application period for any of the income elections.

64AE   Action by Registrar following reconciliation

                   The Registrar is to take such action as is necessary to give effect to sections 64AC and 64AD in relation to a parent (whether by amending any administrative assessment that has been made in relation to the parent or otherwise).

Subdivision C Penalty

64AF   Penalty if a parent underestimates an income amount

             (1)  A parent is liable to pay the Registrar a penalty if:

                     (a)  the parent made an income election relating to a year of income; and

                     (b)  the parent’s actual adjusted taxable income for the year of income has been ascertained by the Registrar; and

                     (c)  the parent has underestimated an income amount in making the income election.

             (2)  If the parent did not make more than one income election relating to the year of income, the parent has underestimated an income amount in making the income election if:

                     (a)  in a case where subsection 60(2) applied to the income election—the parent’s actual adjusted taxable income for the year of income is at least 110% of the amount that applied under that subsection; or

                     (b)  in a case where subsection 60(3) applied to the income election—the amount worked out by subtracting:

                              (i)  the parent’s applicable year to date income amount for the year of income; from

                             (ii)  the parent’s actual adjusted taxable income for the year of income;

                            is at least 110% of the partial year income amount worked out by the parent under subsection 60(4).

             (3)  If the parent made more than one income election relating to the year of income, the parent has underestimated an income amount in making the income elections if the amount worked out by subtracting:

                     (a)  the parent’s applicable year to date income amount (if any) for the year of income; from

                     (b)  the parent’s actual adjusted taxable income for the year of income;

is at least 110% of the parent’s estimated ATI amount for the year of income worked out under subsection 64A(3).

64AG   Amount of penalty

             (1)  If a parent is liable under subsection 64AF(1) to pay a penalty, the amount of the penalty for each income election made by the parent relating to the year of income is 10% of the difference between:

                     (a)  the administrative assessment of child support made under section 64AA in relation to the parent; and

                     (b)  the administrative assessment of child support that would have been made if it were based entirely on the amount that applied under subsection 60(2) or (3), or that was worked out under subsection 62A(1).

             (2)  The penalty is a debt due to the Commonwealth by the parent and is due and payable on the issue of the administrative assessment of child support made under section 64AA in relation to the parent.

64AH   Remission of penalty

             (1)  The Registrar may remit the whole or a part of a penalty that a parent who made an income election is liable to pay under subsection 64AF(1) if:

                     (a)  the parent underestimated an income amount in making the income election because of an amendment of an Income Tax Assessment Act, or because of a ruling or determination under that Act; or

                     (b)  the parent underestimated an income amount in making the income election for some other reason, and the Registrar is satisfied that it would be fair and reasonable in the circumstances to remit the whole or that part of the penalty.

             (2)  If the Registrar makes a decision to remit only part of the penalty, or not to remit any part of the penalty, the Registrar must give written notice of the decision to the parent by whom the penalty is, or but for the remission would be, payable.

             (3)  The notice must include, or be accompanied by, a statement to the effect:

                     (a)  that the parent may, subject to the Registration and Collection Act, object to the decision (the original decision ); and

                     (b)  that if the parent is aggrieved by a later decision on an objection to the original decision, he or she may, subject to that Act, apply to the SSAT for review of the later decision.

             (4)  A contravention of subsection (3) in relation to a decision does not affect the validity of the decision.

46  Subparagraphs 65A(1)(b)(i) and (ii)

Repeal the subparagraphs, substitute:

                              (i)  if subparagraph (ii) does not apply—the parent’s adjusted taxable income determined in accordance with section 43 for the last relevant year of income for the child support period;

                             (ii)  if the day occurs in the application period for an income election made by the parent—the amount that applied under subsection 60(2) or (3), or that was worked out under subsection 62A(1); and

47  Paragraph 146BA(1)(d)

Repeal the paragraph, substitute:

                     (d)  subparagraph 65A(1)(b)(ii) were omitted and substituted with the following:

                           “(ii)  if the parent made an election under subsection 146G(1) relating to the child—the amount estimated by the parent under that subsection.”.

Child Support (Registration and Collection) Act 1988

48  Subsection 80(1) (after table item 11)

Insert:

 

11A

to refuse under subsection 63AD(1) of the Assessment Act to accept an election made by a parent under subsection 63AC(1) of that Act

the parent

11B

to make a determination in relation to a parent under subsection 63AE(1) of the Assessment Act

the parent

49  Subsection 80(1) (table item 12, column headed “Decision”)

Omit “section 64A”, substitute “section 64AH”.

50  Subsection 110U(1)

Omit “section 64A”, substitute “section 64AH”.

Note:       The heading to section 110U is altered by omitting “ section 64A ” and substituting “ section 64AH ”.



 

Part 2 Transitional provisions

51  Transitional provision

(1)       This item applies to an election made by a parent if:

                     (a)  the election was made under section 60 of the Child Support (Assessment) Act 1989 (the CSA Act ) before the commencement of this item; and

                     (b)  the first day in a child support period to which the election applies occurs during the period starting on 1 April 2008 and ending on 30 June 2010; and

                     (c)  the election has not been revoked before that commencement.

(2)       Despite the repeal of section 60 of the CSA Act by this Schedule, the election continues to have effect after that commencement as if that section had not been repealed.

(3)       Despite the amendments made by this Schedule to the CSA Act, that Act, as in force immediately before that commencement, continues to apply in relation to the election as if those amendments had not been made.

(4)       Despite subitem (3), section 64 of the CSA Act, as in force immediately before that commencement, does not apply in relation to the election unless the Registrar determines, on his or her own initiative or under subitem (6), that it should so apply.

(5)       The parent, or the other parent to whom child support is payable, may request the Registrar to determine that section 64 of the CSA Act, as in force immediately before that commencement, applies in relation to the election.

(6)       If a request is made under subitem (5), the Registrar may determine that section 64 of the CSA Act, as in force immediately before that commencement, applies in relation to the election.

52  Application in relation to Western Australian exnuptial children

(1)       This item applies if, immediately after the commencement of this item, the Child Support (Assessment) Act 1989 and the Child Support (Registration and Collection) Act 1988 , as amended by this Act, do not extend to Western Australia in relation to the maintenance of exnuptial children because:

                     (a)  the Parliament of Western Australia has not referred to the Parliament of the Commonwealth the matter of the maintenance of exnuptial children or matters that include that matter; and

                     (b)  Western Australia has not adopted those Acts as amended by this Act.

(2)       Item 51 of this Schedule applies in Western Australia, after Western Australia adopts those Acts as amended by this Act, in relation to the maintenance of exnuptial children:

                     (a)  as if references in that item to the commencement of that item were references to the adoption of those Acts by Western Australia as amended by this Act; and

                     (b)  as if the reference in paragraph (1)(b) of that item to 30 June 2010 were a reference to the day before the adoption of those Acts by Western Australia as amended by this Act.