This topic provides information about satisfying the maintenance (1.1.M.10) action test, and the consequences of not satisfying the maintenance action test (MAT). 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 220.127.116.11.
From 1 July 2012, individuals who are privately collecting child support are deemed to receive the full child support entitlement for the purposes of the maintenance income test (MIT) if it is reasonable for the individual to take action to collect their full entitlement.
Example: Since 2009 Tracey has a private collect child support entitlement of $10,000 per financial year. In 2012-13 Tracey collected $10,500 in child support payments. As Tracey is a private collect individual she is deemed to have received $10,000 which is applied to the MIT. If the $500 is related to arrears from before 1 July 2012, this amount would be included as part of the MIT.
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 MIT, unless the individual advised Centrelink otherwise. Where the amount received was less than the assessed amount, failure of the MAT could have resulted.
Policy reference: FA Guide 18.104.22.168 Child Support Collection
Child Support 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 Child Support collect, the individual should advise Centrelink of periods for which Child Support 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 Child Support is deemed to receive their full child support entitlement for the MIT, 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 Centrelink 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 Centrelink 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. Centrelink deems that Amanda received $5,000 in 2012-13 and $5,000 in 2013-14 in the MIT and Amanda does not fail the MAT.
However, privately collected arrears of child support that relate to a period that a deemed amount did not apply will be included in the MIT when they are received. This includes privately collected child support arrears relating to a period before 1 July 2012.
Example: Justine was private collect from 2009-10 until December 2012 and has $13,000 of outstanding arrears from the payer from 1 July 2009 to 30 June 2012. In October 2012 Justine was successful in obtaining $6,000 of the $13,000 in arrears. As the arrears amount applies to a non-deemed period Centrelink will determine that Justine has received $6,000 in addition to her full child support entitlements in the 2012-13 maintenance income year.
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 Child Support. 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. This may also apply to any outstanding arrears that the individual elects not to collect.
In these circumstances, the individual's rate of FTB Part A will be based on the actual amount of child support received, not the amount of the child support assessment. If at a later date, the individual collects the non-paid child support assessment amount, the amount received should be included in the MIT in the year it is actually received. Full exemptions are available (22.214.171.124).
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 MAT 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 Child Support collect. However, if the arrears relate to an immediate past period, the individual can swap to Child Support collection to have Child Support collect up to 3 months arrears on their behalf.
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 MAT. If the individual transferred from private collect to Child Support collect, Child Support 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 Child Support 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 Child Support 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 126.96.36.199 Exemptions from the Maintenance Action Test
Where an individual opts to change from Child Support collect to private collect, they can elect to collect any arrears of child support owing to them. This has the effect of discharging Child Support 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. Electing to end the collection of arrears from Child Support collection does not mean entitlement to the arrears is being waived.
Where an individual discharges Child Support from the responsibility for collecting arrears, Child Support will notify Centrelink of the date that Child Support collect no longer applies. For the subsequent period of private collect, the deemed amount would include the arrears for the purpose of the MIT, 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.
In the case of a partial or full exemption, the deemed amount may not include the arrears where it is determined that it is not reasonable to collect these arrears. If the individual has a partial exemption, the amount assessed under the MIT should be the amount the individual is actually collecting. If at a later date, the individual collects the non-paid child support assessment amount, the amount received will need to be included in the MIT in the year it is actually received.
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 Centrelink is advised by the social worker, Child Support or other means that the individual is not taking reasonable action to obtain child support, Centrelink 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 Child Support cannot accept an application for child support because Child Support 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 MAT. 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 Child Support 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 188.8.131.52 Taking Reasonable Maintenance Action, 184.108.40.206 Maintenance Action in Progress, 220.127.116.11 When Maintenance Action is Not Applicable, 18.104.22.168 Exemptions from the Maintenance Action Test
Last reviewed: 12 August 2013