5.2.6 Collection from family tax benefit

Context

The Registrar can give written notice to Centrelink to make deductions from FTB payable to a person for a child, and apply the deducted amounts to certain child support debts or carer debts that the person owes (CSRC Act section 72AB).

Act references

CSRC Act section 17, section 30, section 72AB

FA(Admin)Act section 228

Overview

If a person has certain child support debts or a carer debts in relation to a child for whom they will receive FTB, the Registrar can give notice to Centrelink requiring deductions from the person's FTB entitlement. This may reduce the person's FTB entitlement to nil. Any amounts deducted from the person's FTB entitlement are sent to the Registrar and applied to the person's child support debt or carer debt.

Centrelink can only make deductions from the portion of the person's FTB entitlement that relates to a child or children for whom the person owes certain child support debts or carer debts (FA(Admin)Act section 228) (FA Guide 7.4).

Centrelink will not deduct any amounts from the FTB payable to a person to recover child support debts, child support related debts, or carer debts of the following types from a person's FTB:

  • spousal maintenance
  • overseas maintenance liabilities
  • an amount repayable by a former payee under a recovery order (3.1.2) that is registered for collection by the Registrar
  • carer debts as a result of payments under a registered maintenance liability under CSRC Act section 17A, 18 or 18A (spousal maintenance, overseas maintenance liabilities and amounts repayable under a recovery order (CSA Act section 143))
  • estimate or late payment penalties, or
  • fines or costs ordered by a court.

Before the Registrar can issue a notice requiring Centrelink to make deductions from the person's FTB to recover a child support debt or a carer debt, the due date for payment must have passed and there must be amounts overdue. A notice can have an ongoing effect on periodic FTB entitlements until the debt is fully recovered or the notice is withdrawn.

Where a payment arrangement is in place

Where a payment arrangement is already in place to recover the child support debt or carer debt and the person is complying with that arrangement, the Registrar will not collect the debt from the person's FTB payments unless the person defaults on the arrangement.

Collection from other sources

Collection from a person's FTB entitlement does not preclude the Registrar from applying any tax refund that may become available to the person's outstanding child support debt or carer debt.

Issuing a notice

The Registrar commences deductions from a person's FTB payments by giving written notice to Centrelink that is in accordance with FA(Admin)Act section 228, specifying:

  • the person's name
  • the name of each child for whom a child support debt or a carer debt is owed
  • sufficient details to allow Centrelink to identify the person and each child
  • the amount of the child support debt or carer debt being recovered, and
  • the day or days on which deductions are to be made (CSRC Act section 72AB(4)).

The Registrar will notify the person that collection action has commenced. The decision to issue a notice to Centrelink under section 72AB(3) is an appealable refusal decision (4.1.3).

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