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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 the 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 child and that child dies the maintenance liability and therefore the relevant period ends when the child dies. 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 child and that child leaves the care of the individual, the relevant period would end when the child left care.

 

However, if there is an entitlement to maintenance from one payer in respect of more than one child and one of the children dies, the entitlement to maintenance continues for the other 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 child and one of the children leaves the care of the individual, the entitlement to maintenance continues for the other 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 2011, with an annual assessment of $9,648 for the 2 children ($4,824 per annum each). On 2 September 2011, Joanne advises that Wendy died on 30 August 2011. The 14 week bereavement period for Wendy starts on 30 August 2011 and finishes on 5 December 2011. Child Support advise that the new child support assessment for Bob from 30 August 2011 is $6,494 per annum. As Wendy 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, i.e.

 

Period 1: 1 July 2011 - 29 August 2011 is 60 days.

Bob: $4,824 ÷ 365 x 60 = $792.99

Wendy: $4,824 ÷ 365 x 60 = $792.99

Total period 1: $792.99 + $792.99 = $1,585.98

 

Period 2: 30 August 2011 - 30 June 2012 is 305 days.

Bob: $6,494 ÷ 365 x 305 = $5,426.49

Wendy: deceased, no longer in the child support assessment

Total period 2: $5,426.49

 

Total = Period 1 ($1,585.98) + Period 2 ($5,426.49) x 365 ÷ 365 = $7,012.47

Therefore, $7,012.47 is the maintenance income amount applied from 30 August 2011 - 30 June 2012 (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 2011), 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 2012), 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 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 maintenance income for a liability of 120 days.

 

The annualised maintenance income for the total of 220 days is:

(365 ÷ 220) X $1,000 = $1,659.09

The effect of this is to assess $1,659.09 over 220 days, rather than over 180 days which is:

(365 ÷ 180) X $1,000= $2,027.77 over 180 days.

 

Policy reference: FA Guide 3.1.5 Maintenance Action Test for FTB Part A, 3.1.6 Child Support Assessments & Agreements, 3.1.7 Maintenance Income Test

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Last reviewed: 12 August 2013


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Last Edited: 30/07/2013 12:49:48 PM


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