5.2.1 Arrangements for payment
Services Australia can make arrangements with a parent who owes a child support debt or carer debt to the Commonwealth to pay the debt in full, or by instalments. Services Australia will consider the circumstances of the particular case when coming to an arrangement for payment by instalments.
Public Governance, Performance and Accountability Act 2013 section 63, section 110
Establishing a payment arrangement
The Public Governance, Performance and Accountability Act 2013 (PGPA Act) section 63 gives the Finance Minister the power to modify the terms and conditions on which an amount owing to the Commonwealth is to be paid to the Commonwealth. These powers have been delegated to all accountable authorities, which includes Services Australia, and provide the delegation to certain officers within Services Australia to arrange for a parent to pay a debt by instalments.
Arriving at a negotiated payment arrangement can be a useful first step in the enforcement process. It is often a more efficient way to assist a parent to meet their child support obligations than other methods of administrative enforcement.
The nature of an arrangement will differ depending on the circumstances of the case. In making a payment arrangement, Services Australia will consider:
- the amount outstanding
- the time it will take to repay the debt
- the need to have the debt paid in the shortest possible time
- the parent's ability to pay the debt in a lump sum
- whether it would be more effective and quicker for the parent to borrow and/or sell assets in order to pay the debt
- the effect of the arrangement on the child/ren of the assessment
- the protected earnings amount (if a debtor is employed), and
- the need to make sure that any amount deducted is not so high that the debtor sees it as more attractive to leave their employment (if the debtor is employed).
An arrangement may include the following features:
- an agreement to pay the debt off in regular instalments
- an agreement on the date the debt will be satisfied in full
- an acknowledgment that if the parent's circumstances change, either the debt will be repaid in full or another repayment arrangement will be entered into
- an acknowledgment that if a tax refund becomes available during the period of the arrangement, it may be applied to the debt, and
- an acknowledgment that any failure to comply with the arrangement without reasonable excuse will mean that the debt is repayable in full at that time.
Services Australia can periodically review a payment arrangement to ensure it still reflects the parent's current financial circumstances. Arrangements can also be reviewed at any time if new information about the parent's capacity to pay becomes available or if their circumstances change.
A periodic payment arrangement does not prevent the Registrar from using other collection methods if they become available. This could include taking enforcement action if Services Australia receives information about a parent's financial circumstances that indicates the arrangement is no longer appropriate.