Demoting with the Tab key

I have a template in numbered outline form. I can use the toolbar to demote
or promote a new line, however when I hit the Tab key it doesn't demote
(shift+tab doesn't promote either), the numbering remains the same all that
happens is that my Tab moves over. Everyone else who has used the template
has no problems with Tabbing to demote. Any ideas on how to fix this?

Thank you.