This topic provides information about satisfying the maintenance (1.1.M.10) action test, and the consequences of not satisfying the maintenance action test. Topics discussed include:
Maintenance action has been completed when the individual:
For guidance on whether maintenance action has been completed where an individual has a child support agreement in relation to which there is a notional assessment, refer to 188.8.131.52.
From 1 July 2012, individuals who are privately collecting child support are deemed to receive the full child support entitlement for the maintenance income test if it is reasonable for the individual to take action to collect their full entitlement.
Prior to 1 July 2012, an individual who chose to collect their child support privately was assumed to be collecting 100% of their child support assessment or registered agreement. The amount of the assessment or agreement was taken to be the received amount and used when applying the maintenance income test, unless the individual advised the FAO otherwise. Where the amount received was less than the assessed amount, failure of the maintenance action test could have resulted.
Policy reference: FA Guide 184.108.40.206 Child Support Collection
The CSA can generally only collect any child support liability not met for the period 3 months immediately prior to the transfer. In exceptional circumstances this period may be up to 9 months.
After transferring to CSA collect, the individual should advise the FAO of periods for which the CSA will attempt to collect arrears and also the actual amounts of child support privately collected for these periods.
From 1 July 2012, an individual who has not privately collected 100% of the amount assessed by the CSA is deemed to receive their full child support entitlement for the maintenance income test, if it is reasonable for the individual to take action to collect their full entitlement.
If the individual is deemed to receive their full entitlement but actually receives less than their full entitlement, any arrears received that relate to the deemed period are not counted when they are actually received. This is because they have already been deemed to have been received in the income year to which they relate.
Example: Amanda has a child support entitlement of $5,000 for both 2012-13 and 2013-14. Amanda advises the FAO that she received only $4,000 in 2012-13. However, it is determined that it is reasonable for Amanda to take action to collect her full entitlement and therefore it is deemed that Amanda has received $5,000 for 2012-13. During 2013-14 she advises FAO that she has privately collected the $1,000 outstanding from 2012-13. This $1,000 arrears from 2012-13 is not counted as maintenance income for 2013-14 as it has already been included in the deemed amount for 2012-13. The FAO deems that Amanda received $5,000 in 2012-13 and $5,000 in 2013-14 in the maintenance income test and Amanda does not fail the maintenance action test.
However, privately collected arrears of child support that relate to a period that a deemed amount could not apply will be included in the maintenance income test when they are received. This includes privately collected child support arrears relating to a period before 1 July 2012.
A partial exemption may be granted in cases where an individual is collecting child support privately and has a fear of violence or there is risk of harmful or disruptive effects if they were to pursue the collection of the full entitlement or to transfer collection method to the CSA. Individuals in this situation will be referred to a social worker for assessment who may grant the partial exemption.
The partial exemption enables them to collect whatever they can privately without the full deemed amount being applied.
In these circumstances, the individual's rate of FTB Part A will be based on the amount of child support received, not the amount of the child support assessment. Full exemptions are available (220.127.116.11).
If following a retrospective reassessment of child support the individual advises that the liable parent is not going to pay the arrears owed the individual should be advised that it may be in their interest to seek legal advice about enforcing the payment.
If a retrospective assessment affects a past period where a deemed amount applied, FTB entitlements for that past period will be recalculated using the entitlement amount for that period as varied by the retrospective assessment.
However, where the individual had a partial exemption and was collecting less than their full entitlement, child support arrears that become payable for a past period as a result of the retrospective assessment will be counted in the year that they are actually received.
If following a retrospective reassessment of child support the individual advises that the liable parent is not going to pay the arrears owed:
For maintenance action test purposes, the individual will continue to satisfy the requirements as long as they are collecting 100% of their ongoing entitlement.
For all periods the individual is not required to transfer to CSA collect.
Explanation: An individual who privately collects child support is not required to take court action to collect arrears from a retrospective reassessment to satisfy the maintenance action test. If the individual transferred from private collect to CSA collect, the CSA generally could only collect any child support liability not met for the period 3 months immediately prior to the transfer.
For retrospective reassessment cases, this means that the CSA cannot assist with any child support arrears that were incurred during periods prior to the 3 month limitation (unless exceptional circumstances apply). In practical terms this means that the CSA is not in a position to collect any of the arrears for private collect retrospective reassessment individuals.
Act reference: FAAct Schedule 1 clause 10 Effect of maintenance rights
Child Support (Registration and Collection) Act 1988 refer to sections 28A and 39A
Policy reference: FA Guide 18.104.22.168 Exemptions from the Maintenance Action Test
Where an individual opts to change from CSA collect to private collect, they can elect to collect any arrears of child support owing to them. This has the effect of discharging CSA from the responsibility for collecting the arrears. Instead the individual is responsible for collecting the arrears, either under a private arrangement or through the court. Discharging arrears from CSA collection does not mean entitlement to the arrears is being waived.
Where an individual discharges CSA from the responsibility for collecting arrears, CSA will notify FAO of the date that CSA collect no longer applies. For the subsequent period of private collect, the deemed amount would include the arrears for the purpose of the maintenance income test, regardless of whether the individual:
If the individual is unsuccessful in collecting the arrears they should be advised that it would be in their interest to seek legal advice to obtain the arrears.
Reasonable action to obtain child support has not been taken for a child if the individual has chosen not to take reasonable action for reasons such as:
Where maintenance action is applicable and the FAO is advised by the social worker, CSA or other means that the individual is not taking reasonable action to obtain child support, the FAO should contact the individual immediately.
Their FTB Part A for the relevant child or children should be reduced to the base rate of FTB Part A, unless the individual:
Example 1: If the CSA cannot accept an application for child support because CSA cannot be satisfied about parentage of the child, FTB Part A will be reduced to base rate unless the individual applies for an exemption to the maintenance action test. The individual may also seek legal assistance to establish parentage.
Example 2: The individual may not have sought an extension of the child support assessment for their senior secondary school child beyond the child's 18th birthday until the day before the child's 18th birthday. As a result, an extended assessment may not be in place by the time the child turns 18. Base rate FTB will be payable under these circumstances, as there is no child support assessment in place. However, if the child support assessment extension is subsequently granted by the CSA from the child's 18th birthday, reasonable maintenance action will have been taken and arrears of FTB can be paid as appropriate.
Policy reference: FA Guide 22.214.171.124 Taking Reasonable Maintenance Action, 126.96.36.199 Maintenance Action in Progress, 188.8.131.52 When Maintenance Action is Not Applicable, 184.108.40.206 Exemptions from the Maintenance Action Test
Last reviewed: 20 September 2012