7.4 Child Support Debts

Introduction

This chapter explains the provisions relating to child support debts and covers:

  • who this measure applies to,
  • recovery from FTB instalment and past period payments,
  • notice to recover child support debts from FTB,
  • formula for working out the recovery amount,
  • payments not to be included in the recovery amount,
  • tax credits,
  • other debt recoveries from FTB, and
  • appeals and reviews.

Summary

Child Support may, at its discretion, request that debt is recovered from the FTB paid to an individual who owes a child support debt. Child support debts recovered from FTB payments are paid to the Child Support Registrar.

Individuals to whom this measure applies

Individuals who fail to pay a child support debt in respect of one or more designated child support children (1.1.D.75) by the due date, and who are also entitled to be paid FTB for those children, may have their child support debts recovered from their FTB payments. The FTB payment for those children may be reduced to nil as a result of the deductions.

If an individual who has an existing child support debt re-partners and the new partner receives FTB in respect of the debtor's children, this measure does not apply to the new partner's FTB in respect of those children.

Act reference: Child Support (Registration and Collection) Act 1988 section 72AB Deductions from FTB

Notice to Secretary of requirement to recover child support debts from FTB

Child support debts can be recovered from FTB only upon the Child Support Registrar giving the Secretary a written notice under section 72AB of the Child Support (Registration and Collection) Act 1988 to make the recovery. Among other things, the written notice must specify either:

  • the method of working out the recovery amount (which must be in accordance with section 228 of the A New Tax System (Family Assistance)(Administration) Act 1999), or
  • the dollar amount to be recovered.

If the Registrar specifies in the section 72AB notice the dollar amount to be recovered, that amount cannot exceed:

  • the child support debt owing, or
  • the maximum amount recoverable under section 228 of the A New Tax System (Family Assistance)(Administration) Act 1999.

Act reference: Child Support (Registration and Collection) Act 1988 refer to section 72AB Deductions from FTB

Recovery from FTB instalment & past period payments

Recovery can be made from FTB instalment payments and from lump sums as a result of past period claims or as a result of reconciliation.

Act reference: FA(Admin)Act section 227 Payment of deductions to Child Support Registrar

Formula for working out the maximum recoverable amount under section 228

The following table outlines the formulae to be applied when working out the maximum amount that can be recovered from FTB in respect of a child support debt.

If… Then the recovery amount is…
all the individual's children are designated child support children (1.1.D.75) and the debtor is not on income support (1.1.I.50) or an income support supplement, the child support debt owing or the individual's total FTB entitlement, whichever is less.
some of the individual's children are not designated child support children, the child support debt owing or the difference between the individual's existing total FTB entitlement and their FTB entitlement if the designated child support child was not the individual's child, whichever is less.

Example: Joe has full care of Sally who is 8, and Brett who is 4 years old. He also has 35% care of Adam (10), who is a designated child support child. The limit is worked out by deducting Y from X, where:

  • X = Joe's total FTB entitlement for Sally, Brett and Adam
  • Y = Joe's FTB entitlement without Adam (designated child support child)
  • Therefore, the section 228 limit is the child support debt or the difference between X and Y, whichever is less.
all the individual's children are designated child support children and the individual is on income support or an income support supplement, the child support debt owing or the difference between the individual's existing FTB entitlement and the 'foregone amount', whichever is less.

The foregone amount is the difference between the individual's income support, assuming no entitlement to FTB, and the individual's income support, assuming entitlement to FTB.

Explanation: This is to protect from recovery any RA, which would be paid with the income support if the individual ceased to receive FTB.

Example: Tony is a single parent on NSA and receives maximum rate RA. He has 35% care of Stephen, who is 11 years old. The section 228 amount is worked out by deducting Y from X, where:

  • X = Tony's FTB entitlement
  • Y = 'foregone amount': income support (assuming no FTB) - income support (assuming FTB paid)
  • Therefore, the section 228 limit is the child support debt or the difference between X and Y, whichever is less.

Act reference: FA(Admin)Act section 228 Maximum deduction

Policy reference: FA Guide 3.1.4.30 Rent Assistance

Payments not included in the recovery amount

Child support debts cannot be recovered from FTB advances. They can still be recovered during the advance repayment period from the ongoing fortnightly FTB payments paid to an advance individual. The formula above for working out the maximum recoverable amount would be applied to the fortnightly amount paid during the advance repayment period.

Note: Individuals who receive FTB by instalments and who have an outstanding child support debt being withheld from their payments on the advance assessment day (1.1.A.55) will be ineligible to receive an FTB advance. This includes individuals who have elected to receive a regular advance (1.2.8.10) payment.

Act reference: FAAct section 35A Determination of percentage of care-child is not in the adult's care, section 35B Determination of percentage of care-child is in the adult's care

Policy reference: FA Guide 1.2.8 FTB Advance - Description, 2.7 Entitlement to FTB Advance Payment

Other recoveries from FTB

The recovery of advance payments and family assistance and social security overpayments from FTB entitlements take precedence over the recovery of any child support debts. Any remaining FTB, following the recovery of advance payments, family assistance and social security overpayments, can be used for the recovery of child support debts in accordance with section 228 of the A New Tax System Family Assistance (Administration) Act 1999.

Appeals & reviews

An individual can request a review of a Centrelink decision to recover child support debts from FTB payments under the family assistance law.

A request for a review or an appeal against such a decision by a delegate of the Secretary should follow normal review and appeal procedures.

Policy reference: FA Guide 6.1 Centrelink Review & Appeal Process

Last reviewed: 20 September 2016