5.2.6 Collection from Family Tax Benefit

Context

The Registrar can give written notice to Centrelink to make deductions from FTB payable to a person for a child, and apply these amounts to that person's child support debt for the child.

Act references

CSRC Act sections 17, section 30, section 72AB

Overview

A payer who provides between 35% to 65% of the care for a child for whom they pay child support, can be paid FTB for that child. The payer can choose to receive their FTB entitlement as periodic payments or after they lodge their tax return.

If the payer has a child support debt for a child for whom they will receive FTB, the Registrar can give notice to Centrelink requiring deductions from that FTB entitlement. This may reduce the payer's FTB entitlement to nil. Any amounts deducted are sent to the Registrar and applied to the payer's child support debt.

Deductions from FTB are available only to collect child support debts owed by a payer for a child for whom they will receive FTB. Centrelink will not deduct any amounts from the FTB payable to a payer for any other child. Nor can the Registrar recover child support debts (or child support related debts) of the following types from a payer's FTB:

  • spousal maintenance,
  • overseas maintenance liabilities,
  • an amount repayable by a former payee under a registered parentage overpayment order,
  • payee overpayments,
  • estimate or late payment penalties, or
  • fines or costs ordered by a court.

Before the Registrar can issue a notice requiring Centrelink to make deductions from the payer's FTB to recover a child support debt for a child, the due date for payment must have passed and there must be amounts overdue. A notice can have an ongoing effect on periodic FTB entitlements until the child support debt is met or the notice is withdrawn.

Where a payment arrangement is in place

Where a payment arrangement is already in place and the payer is complying with that arrangement the Registrar will not collect from FTB payments unless the payer defaults on the arrangement.

Collection from FTB does not preclude the Registrar from applying any tax refund that may become available to a payer's outstanding child support.

Issuing a notice

The Registrar commences deductions from a payer's FTB payments by giving written notice to Centrelink specifying:

  • the payer's name,
  • the name of each child for whom child support is owed,
  • sufficient details to allow Centrelink to identify the payer and each child,
  • the maximum amount that can be deducted, and
  • the day or days on which deductions are to be made (section 72AB(4)).

The Registrar will notify the payer that collection action has commenced. The decision to issue a notice to Centrelink under section 72AB(3) is an appealable refusal decision (see 4.1.3).

Last reviewed: 15 August 2016