The Guides to Social Policy Law is a collection of publications designed to assist decision makers administering social policy law. The information contained in this publication is intended only as a guide to relevant legislation/policy. The information is accurate as at the date listed at the bottom of the page, but may be subject to change. To discuss individual circumstances please contact Services Australia.

5.2.7 Collection from veterans' pensions & allowances

Context

The Registrar can collect a person's child support debt or carer debt by making deductions from veterans' pensions or allowances payable to that person (CSRC Act section 72AC).

Act references

CSRC Act section 72AC

CSA Act section 66

CSRC Regs section 21

Veterans' Entitlements Act 1986 section 45SB, section 58J(3), section 122E

On this page

The Registrar can give written notice to the Repatriation Commission to deduct amounts from a person's pension or allowance in order to collect that person's child support debt or carer debt (CSRC Act section 72AC).

Section 58J(3) of the Veterans' Entitlements Act 1986 enables the Repatriation Commission to comply with the notice and forward the amounts to the Registrar.

What is a 'veteran's pension or allowance'?

The veterans' pension and veterans' allowance payments from which Services Australia may request deductions are specified at section 72AC of CSRC Act and are:

  • an age service pension under Division 3 of Part III of the Veterans' Entitlements Act 1986
  • an invalidity service pension under Division 4 of Part III of that Act
  • a partner service pension under Division 5 of Part III of that Act
  • an income support supplement under Part IIIA of that Act, or
  • a veteran payment made under an instrument made under section 45SB of that Act.

The Repatriation Commission cannot make deductions under CSRC Act section 72AC from payments that are not listed above.

When can deductions be made from pensions & allowances?

Section 72AC deductions CAN ONLY be made where a person:

Section 72AC deductions CANNOT be made in relation to spousal maintenance liabilities or registrable overseas maintenance liabilities.

Payers with an ongoing liability arising under the CSA Act

Where a payer has an ongoing liability under a child support assessment and is receiving a veteran's pension or allowance, the Registrar can seek to collect child support payments from that pension or allowance.

The Registrar will commence deductions from a payer's pension or allowance if they have an ongoing liability, arrears and/or a poor compliance history.

Services Australia will encourage a payer with no arrears of child support, and a good payment history to consider all their payment options including:

  • making private arrangements
  • paying Services Australia directly
  • having their payments deducted from their veteran's pension or allowance, or
  • using employer withholding.

Services Australia will inform a payer who elects to make private arrangements or is paying Services Australia directly, that it will take immediate collection action if they fail to comply with those arrangements. If the payer defaults, the Registrar will notify the Repatriation Commission to deduct the ongoing liability from the payer's pension or allowance without prior notification to the payer.

Persons with child support arrears

Where a person has child support debt and is receiving a veteran's pension or allowance, the Registrar can notify the Repatriation Commission to deduct amounts from that pension or allowance until the debt is paid.

The Registrar can collect arrears arising from:

  • a court-ordered liability with child support outstanding
  • arrears relating to an assessment which is no longer continuing
  • an ongoing liability with child support outstanding, or
  • an outstanding amount payable under a recovery order registered for collection by the Registrar.

If a person's court-ordered child maintenance liability has been suspended during a low-income non-enforcement period (3.4.5), the Registrar can continue to collect arrears from that person's pension or allowance.

Debts to consolidated revenue which are still debts due to the Commonwealth under section 30 can also be recovered from veterans' pensions or allowances.

Persons with a carer liability

Where a person has a carer liability and is receiving a veteran's pension or allowance, and the person has ceased paying amounts to the Registrar or has not entered into a satisfactory payment arrangement with the Registrar, the Registrar can notify the Repatriation Commission to deduct amounts from that pension or allowance until the carer debt is paid.

Contacting the person

Services Australia will contact a person by telephone to advise that the Registrar will start deductions from their pension or allowance. The exception is where the person has elected to make other payment arrangements and was notified that deductions would start if they defaulted on those arrangements.

If Services Australia does not make contact with the person by telephone, the person will be informed in writing that the Repatriation Commission has been notified to commence deductions from their pension or allowance.

How much can be deducted?

Where there is an ongoing liability but no child support arrears, the 'prescribed periodic deduction' is the lesser of either 3 times the minimum veterans rate or the liability amount for the pension period (CSRC Regs section 21(1)). The minimum veterans rate (2.4.12) is defined in section 21(3) of the CSRC Regs as the minimum annual rate of child support (CSA Act section 66(5)).

Example: Abdul is assessed to pay $50 per week child support and has no child support arrears. Abdul is in receipt of an age service pension. The Registrar is only entitled to ask the Repatriation Commission to deduct 3 times the minimum veterans rate as this is less than the ongoing liability amount.

Where child support arrears exist, the 'prescribed periodic deduction' is the lesser of either 3 times the minimum veterans rate (less any amounts deducted for the ongoing liability) or the amount of the debt that has not been paid (CSRC Regs section 21(2)).

Example: Madeline is assessed to pay $10 per week child support and has arrears of $60. Madeline is in receipt of an invalidity service pension. The Registrar is only entitled to ask the Repatriation Commission to deduct 3 times the minimum veterans rate (less any amount deducted for the ongoing liability) as this is less than the total outstanding child support. $10 is deducted for the ongoing liability, and the balance goes to the arrears.

The Registrar will not collect amounts of less than $1 per week from a person's veteran's pension or allowance. If a payer's child support liability is less than $1 per week, and there are no arrears, the Registrar will allow the amounts due to accumulate until it can instruct the Repatriation Commission to deduct an amount under section 21(2) of the CSRC Regs.

Where a carer debt exists, the Registrar will determine an amount to be deducted (CSRC Act 72AC(2)(e)). For the purposes of making a determination where a carer debt exists, the Registrar may determine an amount that reduces a person's pension or allowance to nil, if the person has consented to the amount of the deduction being an amount that would reduce the pension or allowance to nil (CSRC Act section 72AC(3)).

Where a payment arrangement is in place

If a person is complying with a satisfactory payment arrangement, the Registrar will not collect from their veteran's pension or allowance.

Collection from other sources

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

Where Services Australia becomes aware of another source of income, the Registrar will seek to collect the child support liability and arrears, or carer debt, from that source. If employer withholding, employer withholding with arrears and section 72A are a more appropriate means of collection, those collection methods should be considered. However, a child support related debt or carer debt can only be collected via employer withholding if the person also has an enforceable maintenance liability (5.2.3).

Hardship

The person may contact Services Australia at any time to discuss their individual financial circumstances. The Registrar will not defer collection of the ongoing liability. However, if a person is experiencing difficulties meeting their necessary expenses, the Registrar may defer or reduce the amount being deducted for child support arrears or carer debts. Necessary expenses include but are not limited to accommodation, food, clothing, medical or utilities, for the person and for any children in their care.

Issuing a notice

The Registrar commences deductions from a person's pension or allowance by giving the Repatriation Commission a written notice that:

  • specifies the person's name
  • gives sufficient detail to enable the Repatriation Commission to identify the person

and instructing the Repatriation Commission when any of the following that apply:

  • for liabilities under section 17 of the CSRC Act, to make the prescribed periodic deduction from that person's pension or allowance from a specified day (CSRC Act section 72AC(2)(c))
  • for liabilities under sections 17 and 17A of the CSRC Act where there is an outstanding debt, to make the prescribed periodic deduction from that person's pension or allowance on the day or days specified (CSRC Act section 72AC(2)(d)), or
  • for carer debts, to make a deduction, determined by the Registrar, from the person's pension or allowance from a specified day (CSRC Act section 72AC(2)(e)).

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