5.2.7 Collection from Veterans' Pensions & Allowances

Context

The Registrar can collect a payer's child support debt by making deductions from veterans' pensions or allowances payable to that person (CSRC Act section 72AC).

Act references

CSRC Act section 72AC

CSRC Regs regulation 5EA

Veterans' Entitlements Act 1986 section 58J(3), section 122E

On this page

The Registrar can give written notice to the Repatriation Commission to deduct amounts from a child support payer's pension or allowance in order to collect that person's child support debt (CSRC Act section 72AC).

Section 58J(3) of the Veterans' Entitlements Act 1986 enables the Repatriation Commission to comply with the notice and forward the amounts to the Registrar.

What is a 'veteran's pension or allowance'?

The veterans' pension and veterans' allowance payments from which the Registrar may request deductions are specified at section 72AC of CSRC Act and are:

  • an age service pension under Division 3 of Part III of the Veterans' Entitlements Act 1986,
  • an invalidity service pension under Division 4 of Part III of that Act,
  • a partner service pension under Division 5 of Part III of that Act,
  • an income support supplement under Part IIIA of that Act, or
  • Defence Force Income Support Allowance under Division 2 of Part VIIAB of that Act.

The Repatriation Commission cannot make deductions under section 72AC from payments that are not listed above.

When can deductions be made from pensions & allowances?

Section 72AC deductions can only be made where a person:

Section 72AC deductions cannot be made in relation to spousal maintenance liabilities or registrable overseas maintenance liabilities.

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 veteran's pension or allowance, the Registrar can seek to collect child support payments from that pension or allowance.

The Registrar will commence deductions from a payer's pension or allowance if they have an ongoing liability, 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 including:

  • making private arrangements,
  • paying DHS directly,
  • having their payments deducted from their veteran's pension or allowance, or
  • using employer withholding.

DHS will inform a payer who elects to make private arrangements or is paying DHS directly, that it will take immediate collection action if they fail to comply with those arrangements. If the payer defaults, the Registrar will notify the Repatriation Commission to deduct the ongoing liability from the payer's pension or allowance without prior notification to the payer.

Payers with child support arrears

Where a payer has child support debt and is receiving a veteran's pension or allowance, the Registrar can notify the Repatriation Commission to deduct amounts from that pension or allowance until the debt is paid.

The Registrar can collect arrears arising from:

  • a court-ordered liability with child support outstanding,
  • arrears relating to an assessment which is no longer continuing,
  • an ongoing liability with child support outstanding, or
  • an outstanding amount payable under a parentage overpayment order registered for collection by the Registrar.

If a payer's court-ordered child maintenance liability has been suspended during a low-income non-enforcement period (3.4.5), the Registrar can continue to collect arrears from that payer's pension or allowance.

Payer debts to consolidated revenue which are still debts due to the Commonwealth under section 30 can also be recovered from veterans' pensions or allowances.

Contacting the payer

DHS will contact a payer by telephone to advise that the Registrar will start deductions from their pension or allowance. The exception is where the payer has elected to make other payment arrangements and was notified that deductions would start if they defaulted on those arrangements.

If DHS does not make contact with the payer by telephone, the payer will be informed in writing that the Repatriation Commission has been notified to commence deductions from their pension or allowance.

How much can be deducted?

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

Example: M is assessed to pay $50 per week child support and has no child support arrears. M is in receipt of an age service pension. The Registrar is only entitled to ask the Reparation Commission to deduct 3 times the minimum rate as this is less than the ongoing liability amount.

Where child support arrears exist, the 'prescribed periodic deduction' is the lesser of either 3 times the minimum rate (less any amounts deducted for the ongoing liability) or the amount of the debt that has not been paid (regulation 5EA(2)).

Example: F is assessed to pay $10 per week child support and has arrears of $60. F is in receipt of an invalidity service pension. The Registrar is only entitled to ask the Reparation Commission to deduct 3 times the minimum rate (less any amount deducted for the ongoing liability) as this is less than the total outstanding child support. $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 veteran's pension or allowance. If a payer's child support liability is less than $1 per week, and there are no arrears, the Registrar will allow the amounts due to accumulate until it can instruct the Repatriation Commission to deduct an amount under regulation 5EA(2).

Where a payment arrangement is in place

If a payer is complying with a satisfactory payment arrangement, the Registrar will not collect from their veteran's pension or allowance.

Collection from other sources of income

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

Where DHS becomes aware of another source of income, the Registrar will seek to collect the liability and arrears from that source. If employer withholding, employer withholding with arrears and section 72A are a more appropriate means of collection, those collection methods should be considered.

Hardship

The payer may contact DHS at any time to discuss their individual financial circumstances. The Registrar will not defer collection of the ongoing liability. However, if the payer is experiencing difficulties meeting their necessary expenses, the Registrar may defer or reduce the amount being deducted for child support arrears. 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 payer's pension or allowance by giving the Repatriation Commission a written notice that:

  • specifies the person's name,
  • gives sufficient detail to enable the Repatriation Commission to identify the person,
  • instructs the Repatriation Commission to make the prescribed periodic deduction from that person's pension or allowance from a specified day (CSRC Act section 72AC(2)(c)), and
  • instructs the Repatriation Commission to make the prescribed periodic deduction from that person's pension or allowance on the day or days specified (CSRC Act section 72AC(2)(d)).
Last reviewed: 1 July 2016