5.7.1 Non-pursuit of Debt
The Registrar must pursue recovery of all registered child support debts unless the debts are uneconomical to pursue or not legally recoverable. The Registrar must also pursue recovery of carer debts that are debts due to the Commonwealth under CSRC Act section 69B (see 5.5.5), unless the debts are uneconomical to pursue or not legally recoverable.
CSRC Act section 4, section 69B, section 80
Public Governance, Performance and Accountability Act 2013 section 103(c)
Legal authority for the Registrar not to pursue a debt
The Registrar has no authority to release a person who owes a debt to the Commonwealth from payment of that debt. However, in limited circumstances, the Registrar can decide not to pursue recovery of a debt. The person would continue to owe the debt to the Commonwealth, but the Registrar will not take action to recover it unless the person's circumstances change.
Under the Public Governance, Performance and Accountability Act 2013 (PGPA Act) and the Public Governance, Performance and Accountability Rule 2014 (Recovery of Debts) the Registrar must pursue recovery of all debts to the Commonwealth for which the Registrar is responsible, unless:
- the Registrar is satisfied that the debt is not legally recoverable (PGPA Rule section 11(b)), or
- the Registrar considers that it is not economical to pursue recovery of the debt (PGPA Rule section 11(a)).
Grounds for non-pursuit
Two categories for non-pursuit of debt are allowable under the PGPA Act. All debts must be pursued unless they are irrecoverable at law or uneconomical to pursue.
Irrecoverable at law
A debt may be irrecoverable at law if:
- the Registrar has taken all reasonable action to recover the debt, but has not been able to collect it.
Example: The debtor is deceased and the executor of their estate has advised DHS that there are insufficient assets to meet any part of the child support liability.
- the debtor resides in a country that does not have reciprocal maintenance arrangements with Australia, and the payer does not derive any income or hold any assets in Australia.
Example: The payer resides in China (which is not a reciprocating jurisdiction). The payer has business interests in China, but has no income or assets in Australia.
Uneconomical to pursue
A debt may be uneconomical to pursue if:
- it would cost the Commonwealth more than the amount of the debt to recover it.
Example: The debt is less than $500, unsuccessful recovery action has been taken and the debt balance has not changed for 12 months. The debtor has no capacity to pay the debt.
The debtor is serving a period of imprisonment and has no assets or source of income.
The debtor has been declared bankrupt and has no present or future capacity to pay.
- DHS has taken reasonable action to trace a debtor for a continuous period of at least 6 months but their whereabouts remain unknown and DHS has not identified any income or assets belonging to the debtor.
DHS is required to maintain a register of all the debts that are not being pursued. DHS will regularly review a decision not to pursue recovery of a debt to establish whether there has been a change in the debtor's circumstances that would make it appropriate to resume action to pursue the debt.
DHS will not advise a payer that a decision has been made not to pursue recovery of their child support debt or carer debt. The debt is still owed and will remain on the payer's account. However, DHS may inform a payer that it will take no further action to recover the debt until the payer's circumstances indicate that they have a capacity to pay the debt. DHS will ask the payer to contact the Registrar as soon as the circumstances change.
DHS will advise the payee when a decision is made not to pursue recovery of a debt from a payer. DHS will invite the payee to advise the Registrar if they become aware of any change in the payer's circumstances that may make it possible for DHS to collect the debt.
A payee can object to a decision not to pursue recovery of a debt that has remained unpaid for at least 6 months (CSRC Act sections 4(1) and 80(1)). See 4.1.