5.3.4 Reduction of Debts when Other Debts Paid Back
The Registrar can reduce child support debts or carer debts owed by 1 person in a child support case where that person would otherwise be entitled to be paid debt repayment amounts that were owed to them under a separate case.
CSRC Act section 69B(3), section 71AB, section 76
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Reduction of debts under section 71AB
CSRC Act section 71AB provides for the reduction of child support debts or carer debts owed by 1 person in a child support case where that person would otherwise be entitled to be paid repayment amounts that were owed to them under a separate case.
Under CSRC Act section 71AB(1) if:
- a person ('the first person') owes either a child support debt or carer debt ('the first debt'), and
- the Registrar receives an amount ('the repayment amount') from another person that is owed by that person, and is intended by that person, to be in partial or complete satisfaction of a child support debt or carer debt, and
- the Registrar would, apart from section 71AB, be required to pay the repayment amount to the first person under either CSRC Act section 69B(3) or section 76 (CSRC Act section 71AB(1)).
Then, despite the provisions in 71AB(1), the Registrar may:
- credit the repayment amount against the amount payable under the first debt, and
- if after the amount has been credited, the first debt has been paid in full, pay any excess to the first person (CSRC Act 71AB(2)).
The Registrar will credit carer debt payments paid from the other person to child support debts that the first person owes. However, if the Registrar receives a payment for child support from the other person and the first person owes a carer debt, the Registrar will make a considered decision before crediting the child support payment towards the carer debt. The decision will take into account the ongoing needs of the person with care of the children, and the past and present obligations of both people to pay child support or a carer debt when due.
Example 1: Tom owes a child support debt of $100 to Wendy, and Sandra owes a carer debt of $50 to Tom in a separate child support case. Sandra makes a $50 payment to the Registrar for her carer debt that is owed to Tom. The Registrar credits this repayment amount to Tom's child support debt. Tom now owes $50 in child support debt to Wendy.
Example 2: Morgan owes a child support debt of $150 to Riley, and Liang owes a carer debt of $200 to Morgan in a separate child support case. Liang makes a $200 payment to the Registrar for her carer debt that is owed to Morgan. The Registrar credits this repayment amount to Morgan's child support debt. The child support debt owed to Riley is paid in full and the Registrar pays the $50 excess to Morgan.
The Registrar may pursue collection from either person by other means even when a debt reduction is in place in relation to their child support debt or carer debt, for example, by intercepting a tax refund.
Effect of reducing a debt under section 71AB
Any amount reduced under CSRC Act 71AB is taken to be paid by the first person, in relation to their child support debt or carer debt. Therefore, a debt reduction cannot be reversed.
The first person will be advised in writing when amounts have been applied against their first debt under CSRC Act section 71AB. A person does not have the right to object to the Registrar's decision to reduce, or refusal to reduce, a debt under CSRC Act section 71AB.