5.5.5 Overpayments

Context

An overpayment refers to payment of an amount for a period that exceeds the amount payable for that period (including where no amount is payable). Overpayments generally relate to a liability arising under a child support assessment. However, an overpayment may also relate to a liability arising under other registrable maintenance liabilities, such as a court order for the maintenance of a child or a spouse/partner (see 5.1.2 for registrable maintenance liabilities and how they are registered). Where an overpayment is recoverable by Services Australia, the payer can request that Services Australia not recover the payment.

In this topic, the following terms are used:

  • 'payee' - the person who received the overpayment (from Services Australia or directly from the payer),
  • 'payer' - the person who paid the overpayment (to Services Australia or directly to the payee).

Act references

CSRC Act section 4(1), section 69B

CSA Act section 143

On this page

Overpayments under section 69B of CSRC Act

Under CSRC Act section 69B(1), an amount is a debt due by the payee to the Commonwealth (subject to CSRC Act section 69B(2)):

  • if a payee of a registered maintenance liability is paid an amount, or is taken to be paid an amount because of CSRC Act sections 71AA or 71AB, and
  • the payee was not entitled to be paid an amount at the time it was paid (including because of a subsequent variation to particulars of the entry in the Child Support Register in relation to the registered maintenance liability).

The debt due by the payee to the Commonwealth is a 'carer debt'. The payee of the registered maintenance liability becomes the payer of a carer debt and has a 'carer liability' (CSRC Act section 4(1)).

Example: The monthly liability is $100, and Services Australia collected the full amount due by the payer for the month of March. The payee is entitled to be paid the amount collected of $100. However, the monthly liability was later found to be inaccurate and retrospectively changed to $80 for the month of March. This results in an overpayment of $20 under CSRC Act section 69B(1), as the payee was not entitled to be paid this amount when it was paid in March. Services Australia contacts the payee and explains that they owe a carer debt. The payee pays the amount of $20 to Services Australia under CSRC Act section 69B(1).

CSRC Act section 69B(3) requires any amount that is collected by Services Australia under section 69B(1) to be paid to the payer of the registered maintenance liability.

Overpayments not repayable to the payer under section 69B of CSRC Act

An amount is not repayable by the payee, and is not a debt due to the Commonwealth, under CSRC Act section 69B(1) if:

  • the payee was not entitled to be paid the amount because of a subsequent variation to the particulars of the entry in the Child Support Register in relation to the registered maintenance liability (CSRC Act section 69B(2)(a)), and
  • the variation was a result of
    • a decision that the registered maintenance liability should never have existed (CSRC Act section 69B(2)(b)(i)), or
    • the payer of the registered maintenance liability ceasing to be a resident of Australia or a reciprocating jurisdiction (CSRC Act section 69B(2)(b)(ii)).

While these amounts are not a debt to the Commonwealth and would therefore not be recovered by the Registrar, an amount covered by CSRC Act section 69B(2)(b)(i) may be recovered by the payer if a court makes an order under CSA Act section 143 (3.1.2). A payer cannot recover amounts under CSA Act section 143 that were overpaid due to a payer ceasing to be a resident of Australia.

Methods of recovering carer debt from a payee

A carer debt may be recovered by the following methods:

  • the payee making a payment to Services Australia (5.2.2)
  • collecting from salary or wages (5.2.3)
  • collecting from social security pensions and benefits (5.2.5)
  • collecting from FTB (5.2.6)
  • collecting from veterans' pensions and allowances (5.2.7)
  • applying a tax refund for the payee against the debt (5.2.8)
  • collecting from third parties (5.2.9)
  • collecting from parental leave payments (5.2.10)
  • issuing a departure prohibition order (5.2.11)
  • offsetting debts between payees and payers (including ongoing child support liabilities) (5.3.2)
  • reducing carer debts when other debts are paid back (5.3.4), and/or
  • applying to a court for an order to enforce recovery of the debt (5.4.2).

A payee of a carer liability (who is the payer of the registered maintenance liability that resulted in the overpayment) cannot enforce the carer debt, except by instituting a proceeding to recover the debt under CSRC Act section 113A (5.4.7).

Private methods of recovering overpayments

An overpayment amount may be privately recovered by the payer from the payee if:

  • the 2 parties agree that the payee is to repay the amount to the payer (as a voluntary acceptance or settlement for repayment), or
  • in relation to registered maintenance liabilities (which can include other types of child maintenance liabilities that originate outside the CSA Act but are collected under the CSRC Act) - a court with jurisdiction under the CSA Act makes a recovery order in relation to the payee of the debt (CSA Act section 143), or
  • in relation to a registrable maintenance liability that does not arise under a child support assessment - a court with jurisdiction to enforce recovery of the overpayment makes a recovery order in relation to the receiving person (under court enforcement powers existing outside child support legislation).

Recovery in private collect cases

Generally, if child support is being collected privately and an overpayment occurs, only the payer can recover the overpayment from the payee.

A payer may recover an overpaid amount directly from the payee, either by reaching agreement that the amount should be repaid, or by applying to a court for a recovery order.

Overpayments voluntarily repaid

An overpayment may be voluntarily repaid by the payee to the payer. This is where the 2 parties agree that the payee is to repay an amount to the payer, without the payer obtaining a recovery order from a court under section 143 of the CSA Act. Such an agreement is a voluntary acceptance or settlement for repayment by the payee.

Example 1: A payee considers that a court would be likely to consider that it would be just and equitable in the circumstances for a recovery order to be made, as the cause of the overpayment was a delay by the payee in notifying Services Australia of a change of circumstances. The payee also wants to avoid incurring legal costs. The payee voluntarily agrees to repay the overpayment.

Example 2: A payee considers that a court would be likely to consider that it would not be just and equitable in the circumstances for a recovery order to be made, as the cause of the overpayment was a delay by the payer in notifying Services Australia of a change of circumstances. The payee does not agree to repay the overpayment.

Amounts recoverable under section 143 of CSA Act

If the payee and payer do not agree that an amount should be repaid, the payer may apply to a court for a recovery order.

An amount of child support under the CSA Act or the CSRC Act may be recovered from the payee in a court having jurisdiction under the CSA Act. This is provided for under section 143 of the CSA Act. The court will consider whether it would be just and equitable for a recovery order to be made.

See 3.1.2 for further information.

Overpayments recoverable under enforcement powers outside child support law

An overpayment of a registered maintenance liability that is not a child support assessment and not recoverable by Services Australia may be recovered from the payee by the payer applying to a court with jurisdiction to enforce recovery of the overpayment. This would occur under court enforcement powers existing outside child support legislation.

Last reviewed: 1 July 2021