Commonwealth Numbered Regulations - Explanatory Statements

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CHILD SUPPORT (ASSESSMENT) REGULATIONS (AMENDMENT) 1997 NO. 374

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.