Automated income charging rules

Income charging for information share Child Support payments is automated. This means MSD charges the income automatically, generally with no involvement from staff.

As income charging is automated, these types of payments are always charged in the same way, using defined rules.

There are only a few situations when MSD can change how the system charged income for these payments. For more information see:

Information share Child Support payments are always charged forward as income. This avoids creating debt for clients because the income can be used to work out the correct rate before the client is paid their assistance from MSD.

Other types of income are charged against the period that the income was earned in or represents. Other income, such as wages, can usually be declared in the same week the income was earned. If information share Child Support payments were charged in this way, it could create debt for clients. This is because Child Support is paid in arrears and would be charged as income after the client's assistance was paid to them.

For example, if Inland Revenue paid a client in-cycle Child Support in September, it would represent their entitlement for August. If the income was charged for the same period that the payment represents, the client may have a debt. This would happen if the new income charge meant they were overpaid their benefit in August.

Automatically charging information share Child Support payments forward minimises the risk of overpayments.

The charging period for an information share Child Support payment is always 4 or 5 weeks. This is because most Child Support payments are for a month of Child Support liability.

The period of the income charge is determined by the:

• type of Child Support payment and
• type of financial assistance the client is getting and
• the deemed receipt of the payment

To make the income charging rules clear for staff and clients, the charging period is always 4 or 5 weeks. This applies even if the Child Support is an out-of-cycle payment and may represent a longer period.

As these payments are automated, there is no discretion when charging income. MSD cannot charge information share Child Support payments in a different way.

For other types of income, MSD can determine what period income relates to, based on a client's individual circumstances, and charge it accordingly.