DATE OF ISSUE: 25 AUGUST 1994
AMENDMENT TO DEPARTMENTAL INSTRUCTION B30/94 OF 21 JULY 1994 RELATING TO MAINTENANCE INCOME
Introduction
The purpose of this Departmental Instruction (DI) is to correct an error contained in DI B30/94 of 21 July 1994. It is important that this DI be read in conjunction with DI B30/94 when processing cases where a service pensioner pays maintenance in respect of an estranged spouse or children.
Background
2.DI B30/94 provides information on the receipt and payment of maintenance.
3.Paragraphs 18 to 20 relate to the situation where a service pensioner pays maintenance and details how to assess such cases.
Current Situation
4.Paragraph 18 to 20 read as follows:
"A service pensioner may pay maintenance to another person in respect of a child or children. These maintenance payments reduce the assessable value of ordinary income for that service pensioner.
Dependent Child Add-On (DCAO) can be paid to the veteran if the maintenance payment equals or exceeds the relevant rate of DCAO. The child is considered substantially dependent on the veteran even though another person has custody of the child.
The assessment of maintenance payment is illustrated by the following example.
A veteran separates from his wife. She has custody of their 9 year old daughter. The veteran pays $200 cash maintenance per fortnight. He also receives $400 superannuation per fortnight. In this situation, every dollar of maintenance paid reduces the assessable value of ordinary income by $1.
Therefore, the assessable value of ordinary income is $200 per fortnight. The maintenance payment is recorded on the maintenance screen (PP.MA). This entry will automatically reduce the assessable value of ordinary income.
DCAO is paid to the veteran as the maintenance payment is greater than the relevant amount of DCAO.'
Change
5.These paragraphs should read:
"Maintenance paid to an estranged spouse is deducted from the assessable value of a service pensioner's ordinary income. However, maintenance payments in respect of a child do not reduce the assessable value of ordinary income.
Dependent Child Add-On (DCAO) can be paid to the veteran if the maintenance payment in respect of a child equals or exceeds the relevant rate of DCAO. The child is considered substantially dependent on the veteran even though another person has custody of the child.
The assessment of maintenance payment is illustrated by the following example.
A veteran separates from his wife. She has custody of their 9 year old daughter. The veteran pays a total of $300 cash maintenance per fortnight. $200 is paid in respect of the wife and $100 is paid in respect of the child. The veteran receives $600 superannuation per fortnight. In this situation, every dollar of maintenance paid in respect of the estranged wife reduces the assessable value of ordinary income by $1.
Therefore, the assessable value of ordinary income is $400 per fortnight. The spousal maintenance payment of $200 is recorded on the maintenance screen (PP.MA). This entry will automatically reduce the assessable value of ordinary income.
DCAO is paid to the veteran as the maintenance payment in respect of the child is greater than the relevant amount of DCAO. However, the child maintenance does not reduce the assessable value of ordinary income.'
Contact Officer
6.Any enquiries should be directed to Graham Keaney who can be contacted on (02) 213 7770.
KAY GRIMSLEY
ASSISTANT SECRETARY
INCOME SUPPORT