Child Support (Assessment) Regulations (Amendment) 1997 No. 374
EXPLANATORY STATEMENT
Statutory Rules 1997 No. 374
Issued by the Authority of the Assistant Treasurer
Child Support (Assessment) Act 1989
Child Support (Assessment) Regulations (Amendment)
Section 164 of the Child Support (Assessment) Act 1989 (the Assessment Act) provides that the Governor-General may make Regulations for the purposes of the Act.
The purpose of the Regulations is to prescribe certain matters where persons elect for a child support assessment to be based on an estimate of their income for the year to which the assessment applies instead of on their income for the year two years prior. In particular, the Regulations prescribe the day from when the election would have effect and the formula for converting an annual rate of child support into a daily rate when an election is in force.
A person's child support income amount is a factor in determining how much is payable under a child support assessment. The amount is the person's taxable income for the year two years prior to the child support year. adjusted by an inflation factor. Persons who estimate that their income for a child support year will be at least 15 per cent less than their income for the relevant year may elect for this estimate to be their child support income amount in their child support assessment for that year.
The Child Support Legislation Amendment Act (No. 1) 1997 (the Amendment Act) amended provisions in the Assessment Act relating to income elections. The amendments commence on 23 December 1997.
The amendments to the Assessment Act made it necessary to amend Regulations 7A and 7B of the Child Support (Assessment) Regulations so that the date of effect of elections and revocations of elections is no longer always from the start of the child support year. The amendments also required a consequential amendment to Regulation 8 in relation to converting an annual rate of child support to a daily rate when an election is in force.
Regulation 7A - (Effect of election)
The current Regulation 7A deals with determining the child support income amount of a person who makes an election after 30 June 1993. Regulation 7A is no longer necessary because the child support income amount is now determined under section 61 of the Act, rather than by Regulation, irrespective of when the election was made.
The Regulation omits the existing Regulation 7A and substitutes a provision which specifies the day from when the child support income amount of a person who has made an election applies. The day is the same day the election was made, except where the amount payable for the part of the year before the election was made is already more than the amount (called the 'second amount') that would be payable for the child support year if the child support income amount applied to all that year. In the latter case. it is the day after the day on which the amount payable to that day is first more than the second amount. Where no amount would be payable for the child support year if the child support income amount applied to all that Year, the child support income amount applies from the first day of the child support year.
Regulation 7B - (Effect of revocation after 30 June 1993)
Regulation 7B deals with determining the child support income amount of a person who revokes an election after 30 June 1993 and substitutes another election.
The Regulation omits Regulation 7B. This Regulation is no longer necessary because the child support income amount of a person who revokes an election and substitutes another is now determined under section 63 of the Act, rather than by Regulation. irrespective of when the election was revoked.
Regulation 8 - (Conversion of annual rates into daily rates of payment)
Regulation 8 prescribes the formula for converting annual rates of child support into daily rates of payment.
The Regulation provides an additional formula specifically for converting an annual rate to a daily rate of payment where an election has been made. The formula offsets against payments for the remaining months of the child support year any additional or reduced amount that would have been payable if the person's most recent election had also applied to that part of the year prior to the election having effect.
The Regulations commence on 23 December 1997.
Overview
The Child Support (Assessment) Regulations (Amendment) 1997 No. 374 were enacted to amend the Child Support (Assessment) Regulations 1990 under the Child Support (Assessment) Act 1989. These amendments were necessitated by the Child Support Legislation Amendment Act (No. 1) 1997, which revised the way income elections are handled in child support assessments. The primary objective of these amendments is to align the regulations with the new legislative framework by ensuring that the date of effect of elections and revocations of elections is accurately determined, and to provide a formula for converting annual child support rates into daily rates when an election is in effect. This ensures that the child support income amount is correctly applied from the relevant date, thereby providing a more accurate assessment of child support payable. The regulations were issued by the authority of the Assistant Treasurer and commenced on 23 December 1997.
Scope and Application
The Child Support (Assessment) Regulations (Amendment) 1997 No. 374 pertains to the amendments made to the Child Support (Assessment) Act 1989, aiming to update the regulatory framework governing child support assessments. The amendments apply to individuals who elect to base their child support assessment on an estimated income for the relevant year instead of the income from two years prior, provided that the estimated income is at least 15 per cent less than the income from the relevant year. These Regulations specifically address the date from which such elections take effect and the formula for converting annual child support rates into daily rates when an election is in force. The Regulations ensure that the determination of child support income amounts is aligned with the legislative changes introduced by the Child Support Legislation Amendment Act (No. 1) 1997, which commenced on 23 December 1997. These Regulations apply nationally across Australia and are designed to streamline the process of child support assessments by providing clarity on the effective dates of elections and the conversion formulas.
Key Provisions
The Child Support (Assessment) Regulations (Amendment) 1997 No. 374 introduces several amendments to existing regulations to accommodate changes in the Child Support (Assessment) Act 1989. These amendments are particularly pertinent to how income elections are processed and how annual rates of child support are converted into daily rates when specific conditions are met. Regulation 7A, which previously dealt with the effect of an election made after 30 June 1993, has been omitted because the child support income amount is now determined under section 61 of the Assessment Act, irrespective of when the election was made. Instead, a new provision specifies that the day when the child support income amount applies is the same day the election was made, with specific exceptions to ensure that the amount payable does not exceed a predefined limit.
Similarly, Regulation 7B, which dealt with the effect of revoking an election made after 30 June 1993, has been omitted as the child support income amount for a person who revokes an election and substitutes another is now determined under section 63 of the Assessment Act. Regulation 8, which prescribes the formula for converting annual rates of child support into daily rates, has been amended to include an additional formula specifically for cases where an election has been made. This formula ensures that payments for the remaining months of the child support year are offset by any additional or reduced amount that would have been payable if the most recent election had applied to that part of the year prior to the election having effect.
The amendments impose several obligations on the parties involved, primarily requiring them to comply with the new provisions regarding the effect of income elections and the conversion of annual child support rates into daily rates. Individuals making or revoking elections must adhere to the new determinations outlined in sections 61 and 63 of the Assessment Act. Additionally, the Department of Human Services must apply the new formula provided in Regulation 8 when converting annual rates into daily rates. These obligations ensure that child support assessments are calculated accurately and fairly, reflecting the most recent income elections and adjustments.
Failure to comply with these regulations may result in civil or criminal consequences. Although the specific penalties for non-compliance are not detailed in the explanatory statement, it is common under Australian law for breaches of child support regulations to incur fines and, in severe cases, imprisonment. The precise penalties would be governed by the broader legislative framework under which the Child Support (Assessment) Act operates, but they could include significant financial penalties and potential legal action against those found in breach.