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.

5.5.5 Overpayments

Context

An overpayment occurs when a payee receives an amount of child support that exceeds the amount of child support payable for that period. Overpayments usually occur when a child support assessment is reduced for a past period.

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 of the overpayment can request that Services Australia not recover the payment.

Act references

CSRC Act section 4(1), section 69B

CSA Act section 143

On this page

Overpayments in private collect cases

Generally, if child support is being collected privately and an overpayment occurs, only the payer (not Services Australia) 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.

Private methods of recovering overpayments

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

  • both parties agree that the payee is to repay the amount to the payer (as a voluntary acceptance or settlement for repayment)
  • 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).

Voluntarily repayment of overpayments

The payee may voluntarily repay an overpayment to the payer. This occurs where both parties agree that the payee is to repay an amount to the payer, and the payee then repays the overpayment to the payer. Such an agreement is a voluntary acceptance or settlement for repayment by the payee.

Example: 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: 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.

Child support recovery orders

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.

Agency collect - overpayments which are repayable to the payer (carer debt)

An overpayment in an agency collect arrangement, is a debt due by the payee to the Commonwealth (CSRC Act section 69B(1), subject to 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 a debt offset (5.3.2), and
  • the payee was not entitled to be paid an amount at the time it was paid (including because the registered maintenance liability was subsequently retrospectively reassessed).

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)). Any carer debt amount that is collected by Services Australia under section 69B(1) is paid to the payer of the registered maintenance liability (section 69B(3)).

Example: The monthly liability is $1,000, and Services Australia collected the full amount due by the payer for the month of March. In May, the monthly liability for March was updated and retrospectively changed to $800. This results in an overpayment of $200 (section 69B(1)). Services Australia contacts the payee and explains that they owe a carer debt. The payee pays the amount of $200 to Services Australia under section 69B(1).

Methods of recovering carer debt from a payee

A carer debt may be recovered by the following methods:

  • offsetting the debt against ongoing child support liabilities or debts between payees and payers (5.3.2)
  • reducing carer debts when other debts are paid back (5.3.4)
  • 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 DPO (5.2.11)
  • 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 became the overpayment) cannot enforce the carer debt, except by instituting a proceeding to recover the debt under CSRC Act section 113A (5.4.7).

Agency collect - overpayments which are not repayable to the payer

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

  • the payee was not entitled to be paid the amount because the registered maintenance liability was subsequently retrospectively reassessed (section 69B(2)(a)), and
  • the reassessment was because
    • a decision is made that the registered maintenance liability should never have existed (section 69B(2)(b)(i)), or
    • the payer of the registered maintenance liability stopped being a resident of Australia or a reciprocating jurisdiction (section 69B(2)(b)(ii)).

An amount may be recovered by the Registrar if a court makes a recovery order (3.1.2) requiring the former payee to repay an amount because the registered maintenance liability should never have existed (including because the former payer is not the parent).

A payer cannot recover amounts that were overpaid because the payer stopped being a resident of Australia.

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