5.2.5 Collection from Social Security Pensions & Benefits

Context

The Registrar can collect a person's child support debt or carer debt by making deductions from social security pensions or benefits payable to that person (CSRC Act section 72AA).

Act references

CSRC Act section 72AA

CSRC Regs regulation 20

SS(Admin)Act section 238

SSAct section 23

Farm Household Support Act 2014 section 91, section 93

On this page

The Registrar can give written notice to the Secretary to deduct amounts from a child support debtor's or carer debtor's pension or benefit in order to collect that person's child support debt or carer debt (CSRC Act section 72AA).

SS(Admin)Act section 238 enables the Secretary to comply with the notice and forward the amounts to the Registrar.

What is a 'social security pension or benefit'?

CSRC Act section 72AA(6) provides that the terms 'social security benefit' and 'social security pension' have the same respective meanings as in the SSAct (defined by section 23(1) of that Act). The reference in section 23(1) of the SSAct to 'social security benefit' is modified, by sections 91 and 93 of the Farm Household Support Act 2014, to be taken to include 'farm household allowance' under that Act. This means that the terms 'social security benefit' and 'social security pension' in CSRC Act section 72AA(6) include the following payments.

Social Security Benefit Social Security Pension
Widow allowance Age pension
Youth allowance Disability support pension
Austudy payment Wife pension
Newstart allowance Carer payment
Sickness allowance Pension PP (single)
Special benefit Sole parent pension
Partner allowance Bereavement allowance
Mature age allowance under Part 2.12B Widow B pension
Benefit PP (partnered) Mature age partner allowance
Parenting allowance (other than non-benefit parenting allowance) Special needs pension
Farm household allowance  

The Secretary cannot make deductions under section 72AA from payments that are not listed above. However, payments from ABSTUDY (5.2.9) may be collected by other means.

When can deductions be made from pensions & benefits?

Section 72AA deductions can be made in the following circumstances:

Spousal maintenance is a form of 'child support debt' (sections 4(1) and 30 of the CSRC Act). Spousal maintenance arising under an overseas maintenance liability is therefore subject to the provisions of section 72AA. However, spousal maintenance arising under a liability under Australian law is excluded from the provisions of section 72AA (see below).

Section 72AA deductions cannot be used to collect:

  • outstanding penalty amounts, and
  • spousal maintenance arising under Australian law (specifically excluded by subsection 72AA(4)).

Payers with an ongoing liability arising under the CSA Act

Where a payer has an ongoing liability under a child support assessment and is receiving a pension or benefit, the Registrar can seek to collect child support payments from that pension or benefit.

The Registrar will commence deductions from a payer's pension or benefit if they have an ongoing liability, and arrears and/or a poor compliance history.

DHS will encourage a payer with no arrears of child support, and a good payment history to consider all their payment options:

  • make private arrangements,
  • pay DHS directly,
  • have their payments deducted from their social security pension or benefit, or
  • use employer withholding.

DHS will inform a payer who elects to make private arrangements or is paying directly that immediate collection action will be taken if they fail to comply with those arrangements. If the payer defaults, deductions of the ongoing liability from the payer's pension or benefit will be made without prior notification to the payer.

Debtors with child support or maintenance arrears

Where a debtor is in arrears and is receiving a social security pension or benefit, the Registrar can notify the Secretary to deduct amounts from that pension or benefit until the debt is paid.

The Registrar can collect arrears arising in the following circumstances:

  • a court-ordered liability with amounts of child maintenance outstanding,
  • child support arrears relating to an assessment which is no longer continuing,
  • an ongoing assessment with child support outstanding,
  • arrears of child or spousal maintenance arising under an overseas maintenance liability, and
  • an outstanding amount payable under a recovery order registered for collection by the Registrar.

If a debtor's court-ordered maintenance liability has been suspended during a low-income non-enforcement period (3.4.5), the Registrar can continue to collect arrears from that debtor's pension or benefit that arose before commencement of the low-income non-enforcement period.

Debts to consolidated revenue which are still debts due to the Commonwealth under section 30 can also be recovered from social security pensions or benefits.

Debtors with a carer debt

Where a debtor has a carer debt and is receiving a social security pension or benefit, and the debtor has ceased paying amounts to the Registrar or has not entered into a satisfactory payment arrangement with the Registrar, the Registrar can notify the Secretary to deduct amounts from that pension or benefit until the debt is paid.

How much can be deducted?

Where there is an ongoing child support assessment but no child support arrears, the 'prescribed periodic deduction' is the lesser of either 3 times the minimum social security rate or the liability amount for the instalment period (CSRC Regs regulation 20(1)). The minimum social security rate is defined in regulation 20(3) as the minimum annual rate of child support (2.4.12) (CSA Act section 66(5)).

Example: Mario is assessed to pay $30 per week child support under an agreement and has no child support arrears. Mario is now in receipt of a newstart allowance. The Registrar can deduct 3 times the minimum social security rate as this is less than the ongoing liability amount.

Where child support or maintenance arrears exist, the 'prescribed periodic deduction' is the lesser of either 3 times the minimum social security rate (less any amounts deducted for the ongoing liability) or the amount of the debt that has not been paid (CSRC Regs regulation 20(2)).

Example: Yang is assessed to pay $10 per week child support and has arrears of $60. Yang is in receipt of a sickness allowance. The Registrar can deduct 3 times the minimum social security rate as this is less than the amount of child support outstanding. $10 is deducted for the ongoing liability, and the balance goes to the arrears.

The Registrar will not collect amounts of less than $1 per week from a person's pension or benefit. If a payer's child support liability is less than $1 per week, and there are no arrears, the amounts due will be allowed to accumulate until the Registrar can instruct the Secretary to deduct an amount under regulation 20(2).

Where a carer debt exists, the Registrar will determine an amount to be deducted (CSRC Act section 72AA(2)(e)). The Registrar may determine an amount that reduces a person's social security pension or benefit to nil, if the person has consented to the amount of the deduction being an amount that would reduce their social security pension or benefit to nil (CSRC Act section 72AA(2A)).

Where a payment arrangement is in place

If a person is complying with a satisfactory payment arrangement, the Registrar will not collect from their pension or benefit.

Collection from other sources of income

Collection from social security pensions or benefits does not preclude the Registrar from applying any tax refund that may become available to a person's outstanding debt.

Where the Registrar becomes aware of another source of income the Registrar will seek to collect the child support liability and arrears, or carer debt, from that source. If employer withholding, employer withholding with arrears or issuing section 72A notices are a more appropriate means of collection those collection methods should be considered. However, a child support related debt or carer debt can only be collected via employer withholding if the debtor also has an ongoing child support liability (see 5.2.3)

Hardship

The person may contact DHS at any time to discuss their individual financial circumstances. The Registrar will not defer collection of the ongoing liability. However, if a person is experiencing difficulties meeting their necessary expenses, the Registrar may defer or reduce the amount being deducted for collection of arrears or carer debts. Necessary expenses include, but are not limited to accommodation, food, clothing, medical or utilities, for the payer and for any children in their care.

Issuing a notice

The Registrar commences deductions from a person's pension or benefit by giving the Secretary a written notice specifying:

  • the person's name,
  • sufficient detail to enable the Secretary to identify the person,

and instructing the Secretary:

  • for liabilities under section 17(2) of the CSRC Act, to make the prescribed periodic deduction from that payer's social security pension or benefit from a specified day (CSRC Act section 72AA(1)(b)),
  • for outstanding child support debts, to make the prescribed periodic deduction from the person's social security pension or benefit from a specified day (CSRC Act section 72AA(2)(d)), or
  • for carer liabilities, to deduct an amount, determined by the Registrar, from the payer's social security pension or benefit from a specified day (CSRC Act section 72AA(2)(e)).

The Registrar can issue the notice electronically or by any other means (section 72AA(3)). The Registrar is not required to provide the payer with a copy of the notice.

Last reviewed: 2 July 2018