Parents can make their own arrangements for collection of payments. It is recommended that a record of payments is maintained in the form of a receipt book or payment by regular bank transaction. Private collection is only recommended in cases where the payer is likely to pay or has a good payment history.
Parents can agree to pay or receive less than the amount calculated in the assessment. However, the Family Tax Benefit (A) will be calculated on the amount stated in the assessment, not the lesser amount agreed by the parents.
If a private collection arrangement breaks down, a parent can ask the Agency to start collecting the liability. The Agency can usually only backdate collection three months, so it is important to take action promptly if payments are not being made.
Private Enforcement of Child Support Debts
From 1 January 2007 payees can personally make an application to a court to enforce collection of outstanding payments of child support while the case is still registered for collection with the Department of Human Services. Parents are required to advise the Department of Human Services in writing of their intention to take private enforcement action. The department must also be notified of any orders made by the Court in relation to the debt. Legal advice should be sought before taking action.
Child Support Agency Collection
Periodic payments pursuant to Child Support Assessments, Child Support Agreements, and Court Orders for Adult Child Maintenance and Spousal Maintenance can be registered for collection with the Department of Human Services.
Once the liability is registered with the Child Support Agency for collection, the debt becomes a debt to the Commonwealth, and the Department of Human Services becomes responsible for collection of the debt.
Agreements for non-periodic payments (such as school fees) cannot be enforced by the Department of Human Services.
If payments of child support are not made privately, the Department of Human Services is able to collect payments from wages, bank accounts, tax refunds, compensation or insurance payments, or any other source of funds that can be identified.
Collection from Centrelink benefits
Payers who receive Centrelink benefits, and who do not pay voluntarily, will have child support payments collected from their benefits.
Collection and Family Tax Benefit(A)
A payee who opts to privately collect payments of child support will be deemed by Centrelink to be receiving the full rate of child support that s/he is entitled to receive, and their Family Tax Benefit(A) will be calculated using the Entitlement Method.
A payee who is not receiving child support payments under a private collection arrangement can ask the Agency to commence collection of the liability. Some payees may be eligible for a partial exemption from the requirement to collect child support. An appointment with a Centrelink social worker is required to obtain an exemption.
Clients contemplating changing from Department of Human Services collection arrangement to a private collection arrangement should seek legal advice before taking this step.
Non-Agency Payments apply to cases that are being collected by the Department of Human Services. The payer can seek credit for in-kind or cash payments made in lieu of child support by advising the Department of Human Services. If the payee agrees that such amounts were intended to be payments of child support, they will be credited against the payer’s child support liability.
However, if the payee does not agree, there are only very limited circumstances in which Non-Agency Payments can be credited. These are called Prescribed Non-Agency Payments (PNAPS) and primarily relate to
- various educational expenses
- essential medical and dental treatment and
- payments towards accommodation, utilities and vehicle expenses.
Advice should be sought before making non-Agency payments as the payer will only be able to receive a maximum credit of 30% of the future monthly liability, with any unused credit being carried over to the following months. The remaining 70% of the liability is required to be paid by the due date in order to be eligible for the 30% credit.
From 1 July 2008, a payer who has Regular Care (14%) or more will not be able to make a claim for Prescribed Non-Agency Payments. This is because the new formula recognizes that parents with regular care or more contribute directly to the costs of children.
Child Support Reforms
On 1 July 2006, the percentage of credit that can be claimed increased from 25% to 30%.
The content of the Law Handbook is made available as a public service for information purposes only and should not be relied upon as a substitute for legal advice. See Disclaimer for details. For free and confidential legal advice in South Australia call 1300 366 424.