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 or carer debt for the child.

Act references

CSRC Act section 17, section 30, section 72AB

Overview

A person who provides 35% or more care of a child can be paid FTB for that child. The person can choose to receive their FTB entitlement as periodic payments or after they lodge their tax return.

If the person has a child support debt or a carer debt in relation to 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 person's FTB entitlement to nil. Any amounts deducted are sent to the Registrar and applied to the person's child support debt or carer debt.

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

  • spousal maintenance,
  • overseas maintenance liabilities,
  • an amount repayable by a former payee under a recovery order (3.1.2) that is registered for collection by the Registrar,
  • carer debts as a result of payments under a registered maintenance liability under CSRC Act section 17A, 18 or 18A (spousal maintenance, overseas maintenance liabilities and amounts repayable under a recovery order (CSA Act section 143)),
  • 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 person's FTB to recover a child support debt or a carer debt in relation to 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 A notice can have an ongoing effect on periodic FTB entitlements until the debt is met or the notice is withdrawn.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 person is complying with that arrangement the Registrar will not collect from FTB payments unless the person defaults on the arrangement.

Collection from other sources

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

Issuing a notice

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

  • the person's name,
  • the name of each child for whom a child support debt or a carer debt is owed,
  • sufficient details to allow Centrelink to identify the person 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 person 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: 13 August 2018