5.5.5 Overpayments

Summary

An overpayment refers to payment of an amount for a period that exceeds the amount payable for that period (including where no amount is payable). An overpayment would generally relate to a liability arising under a child support assessment. However, an overpayment may also relate to a liability arising under other registrable maintenance liabilities, such as a court order for the maintenance of a child or a spouse/partner (see 5.1.2 for registrable maintenance liabilities).

In this topic, the following terms are used:

  • 'receiving person' - the person who received the overpayment (from DHS or directly from the paying person),
  • 'paying person' - the person who paid the overpayment (to DHS or directly to the receiving person).

An overpayment is recovered by DHS from the receiving person as a debt due to the Commonwealth if:

  • an amount of a registered maintenance liability is paid to the receiving person by DHS, and:
    • the receiving person was not entitled to be paid the amount at the time it was paid (CSRC Act, section 79(1)(b)(i)), or
    • the overpaid amount results from a decision with retrospective effect that causes a variation to particulars of the entry in the Child Support Register in relation to the liability, and the amount is repayable by the Registrar to the paying person (CSRC Act, section 79(1)(b)(ii)), or
  • a court declares that the paying person in relation to a child support assessment (DHS collection or private collection) is not a parent of a child and makes a recovery order (CSA Act, section 107 and 143), and the recovery order is registered for collection by DHS (CSRC Act, section 17A).

Where the above does not apply to an overpayment, the amount may be privately recovered by the paying person from the receiving person if:

  • the 2 parties agree that the receiving person is to repay the amount to the paying person (as a voluntary acceptance or settlement for repayment), or
  • in relation to a child support assessment - a court with jurisdiction under the CSA Act makes a recovery order in relation to the receiving person (CSA Act, section 143), or
  • in relation to a registrable maintenance liability that does not arise under a child support assessment - a court with jurisdiction to enforce recovery of the overpayment makes a recovery order in relation to the receiving person (under court enforcement powers existing outside child support legislation).

Act references

CSRC Act section 17A, section 72, section 79

CSA Act section 107, section 143

SSAct section 1228(2B), section 1231(1)(bb)

On this page

Overpayments under section 79(1)(b)(i) of CSRC Act

An overpayment of a registered maintenance liability occurs if the receiving person was not entitled to be paid an amount at the time it was paid. The overpayment comes within section 79(1)(b)(i) of the CSRC Act. The overpayment is recovered by DHS as it is a debt due by the receiving person to the Commonwealth.

Example 1: The monthly liability is $300, and DHS collected the full amount due by the payer for the month of September. The receiving person is entitled to be paid the amount collected of $300. However, DHS incorrectly pays $3000 to the receiving person in October. This results in an overpayment of $2700 under section 79(1)(b)(i), as the receiving person was not entitled to be paid this amount when it was paid in October.

Example 2: An amount of $500 is collected by DHS from a payer in a child support case, and mistakenly paid to a person who is not the payee for that case (but is a payee in a different case). The receiving person (payee in the different case) was not entitled to be paid the amount collected of $500, and it is an overpayment under section 79(1)(b)(i).

The payee to whom the amount collected should have been paid will receive payment of that amount from DHS, as it is required under section 76 to pay the amount collected of $500 to the payee for that case (regardless of any mistaken payment to a different person).

Example 3: An amount of $500 is received by DHS from ATO in relation to a taxpayer who is originally considered to be a payer in a child support case, and paid to the receiving person for that case. Subsequently, it is determined that the taxpayer is not the payer in the child support case as they are two different people, and DHS refunds the amount of $500 to ATO. The receiving person was not entitled to be paid the amount of $500, and it is an overpayment under section 79(1)(b)(i).

Overpayments under section 79(1)(b)(ii) of CSRC Act

An overpayment of a registered maintenance liability may result from a subsequent variation to particulars of the entry in the Child Support Register in relation to the liability. For example, this may occur due to a decision with retrospective effect that decreases the annual rate of child support payable under a child support assessment or that ends the assessment. Similarly, it may occur due to a court order with retrospective effect that decreases or ends the amount payable under a registered maintenance liability.

This type of overpayment comes within section 79(1)(b)(ii) of the CSRC Act if the amount is repayable by the Registrar to the paying person. As this assessment may be complex, the individual circumstances of a case may need additional consideration to assess whether this provision applies. The processes for administering overpayments allow for either party to discuss with DHS any concerns the person may have about an overpayment decision.

Method of recovery of section 79 debt from receiving person

An overpayment of a registered maintenance liability that is recoverable by DHS from the receiving person as a debt due to the Commonwealth under section 79 of the CSRC Act may be recovered by the following methods:

  • the receiving person making a payment to DHS,
  • applying a tax refund for the receiving person against the debt (CSRC Act, section 72),
  • if the receiving person is entitled to receive further payments of amounts collected by DHS for a registered maintenance liability - reducing the payments by an amount determined by DHS (CSRC Act, section 79(2)),
  • by making deductions of an amount determined by DHS from a social security payment to the receiving person (SSAct section 1228(2B), section 1231(1)(bb)),
  • applying to a court for an order to enforce recovery of the debt.

Parentage overpayments

Parentage overpayments occur where a court with jurisdiction under the CSA Act declares under section 107 of that Act that a paying person in relation to a child support assessment is not a parent of a child, and makes a recovery order under section 143 of that Act. Unlike other orders made under section 143 of the CSA Act, parentage overpayment orders can be registered for collection by DHS under section 17A of the CSRC Act.

For further details, see 3.1.2.

Private recovery

Generally, an overpaid amount that was privately collected can only be recovered by the paying person from the receiving person. The exception is a parentage overpayment.

In relation to an overpaid amount that was collected by DHS, if the overpayment is not recoverable by DHS from the receiving person as a debt due to the Commonwealth under section 79 of the CSRC Act, the overpayment may be privately recovered by the paying person from the receiving person.

A paying person may recover an overpaid amount directly from the receiving person, either by reaching agreement that the amount should be repaid, or by applying to a court for a recovery order.

Overpayments voluntarily repaid

An overpayment may be voluntarily repaid by the receiving person to the paying person. This is where the two parties agree that the receiving person is to repay an amount to the paying person, without the paying person obtaining a recovery order from a court under section 143 of the CSA Act. Such an agreement is a voluntary acceptance or settlement for repayment by the receiving person.

Example 1: A receiving person considers that a court would be likely to consider that it would be just and equitable in the circumstances for a recovery order to be made, as the cause of the overpayment was a delay by the receiving person in notifying DHS of a change of circumstances. The receiving person also wants to avoid incurring legal costs. The receiving person voluntarily agrees to repay the overpayment.

Example 2: A receiving person considers that a court would be likely to consider that it would not be just and equitable in the circumstances for a recovery order to be made, as the cause of the overpayment was a delay by the paying person in notifying DHS of a change of circumstances. The receiving person does not agree to repay the overpayment.

Overpayments recoverable under section 143 of CSA Act

If the receiving person and paying person do not agree that an overpaid amount should be repaid, the paying person may apply to a court for a recovery order.

An overpayment of child support under the CSA Act may be recovered from the receiving person in a court having jurisdiction under the CSA Act. This is provided for under section 143 of the CSA Act. The court will consider whether it would be just and equitable for a recovery order to be made.

Overpayments recoverable under enforcement powers outside child support law

An overpayment of a registered maintenance liability that is not a child support assessment and not recoverable by DHS may be recovered from the receiving person by the paying person applying to a court with jurisdiction to enforce recovery of the overpayment. This would occur under court enforcement powers existing outside child support legislation.

Last reviewed: 3 January 2017