Child Support Legislation Amendment (Reform of the Child Support Scheme - New Formula and Other Measures) Act 2006 (146 of 2006)

Schedule 5   Amendments relating to child support agreements and court orders (commencing on 1 July 2008)

Part 1   Main amendments

Division 2   Lump sum payments

Child Support (Registration and Collection) Act 1988

58   After section 69

Insert:

69A Crediting of lump sum payments

(1) This section applies if:

(a) either:

(i) a child support agreement accepted by the Registrar includes lump sum payment provisions in accordance with paragraph 84(1)(e) of the Assessment Act; or

(ii) a court has made an order under section 123A of that Act in relation to the provision of child support in the form of a lump sum payment; and

(b) the Registrar has been notified that the lump sum payment has been paid in accordance with the agreement or order.

(2) The Registrar must, in accordance with subsection (3):

(a) in respect of an initial period or payment period, in a year of income, for a registered maintenance liability, credit the remaining lump sum payment against the liability:

(i) if the agreement or order states that the lump sum payment is to be credited against the liability in relation to a specified percentage of the amount payable under the liability - in relation to that percentage of the amount payable under the liability; and

(ii) if subparagraph (i) does not apply - in relation to 100% of the amount payable under the liability; and

(b) reduce, but not below nil, the remaining lump sum payment by the amount so credited.

(3) The Registrar must credit a remaining lump sum payment and reduce the remaining lump sum payment at the end of each year of income.

(4) The remaining lump sum payment , in relation to the lump sum payment paid under the agreement or order, means:

(a) for the initial period or the first payment period that occurs after the agreement is accepted or the order is made - the lump sum payment; and

(b) for the first payment period that begins on or after 1 January in a calendar year (other than a payment period covered by paragraph (a)) - the remaining lump sum payment for the previous initial period or payment period as indexed under subsection (5); and

(c) otherwise - so much of the remaining lump sum payment as remains after crediting under the previous application of this section.

(5) The remaining lump sum payment, for the first payment period that begins on or after 1 January in a calendar year, is indexed as follows:

The remaining lump sum payment for the previous initial period or payment period * Indexation factor

where:

base quarter means the September quarter (before the September quarter for the previous calendar year, but after the agreement is accepted or the order is made) with the highest index number.

indexation factor means:

Index nubmer for the September quarter of the previous calendar year / Index number for the base quarter

index number for a quarter is the All Groups Consumer Price Index number that is the weighted average of the 8 capital cities and is published by the Australian Statistician in respect of that quarter.

(6) If an indexation factor worked out under subsection (5) would be less than 1, the indexation factor is to be increased to 1.

(7) Subject to subsection (8), if at any time (whether before or after the commencement of this subsection), the Australian Statistician publishes an index number for a quarter in substitution for an index number previously published by the Australian Statistician for that quarter, the publication of the later index number is to be disregarded for the purposes of subsection (5).

(8) If at any time the Australian Statistician changes the reference base for the Consumer Price Index, regard is to be had, for the purposes of applying subsection (5) after the change takes place, only to index numbers published in terms of the new reference base.