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.

5.6.1 Election to end collection

Context

If the Registrar has registered a child support liability for collection, the payee (or the payee and payer jointly) can make an election that the Registrar end collection under section 38A of the CSRC Act. The payee may also elect for the Registrar to not collect any arrears of child support.

Act references

CSRC Act section 24A, section 30, section 38, section 38A

Making an election

  • A payee can make an election that the Registrar end collection of child support.
  • The payee and payer can make a joint election that the Registrar end collection.
  • A payer cannot make an election that the Registrar cease collecting child support for the payee.

An election to end collection can be made in writing, on an approved form or by phone.

The election must specifically indicate that the payee (or the payer and payee jointly) chooses for the Registrar to stop collecting child support. The election may specify a date from which the Registrar should cease to collect the child support but this is not a requirement. The payee (or the payer and payee jointly) making the election can also elect for the Registrar not to collect any arrears of child support.

The Registrar ends collection from a specified terminating day

The Registrar must accept an election to end collection. The Registrar will vary the particulars in the Child Support Register (the Register) to show that the liability ceased to be enforceable from a specified terminating day if the election:

  • nominated a date for the Registrar to end collection, the Registrar will use that date
  • did not nominate a date for the Registrar to end collection, the Registrar will use the date that the election was received as the terminating date
  • nominates a day in a current low income non-enforcement period, the Registrar will specify a terminating day that is the day immediately before the start of that low income non-enforcement period
  • nominates a day in an expired low income non-enforcement period, the Registrar will specify a terminating day that is the day immediately after the end of that low income non-enforcement period.

The Registrar must specify a terminating day that is no more than 60 days after the election was received. The terminating day cannot be a day in a low income non-enforcement period (section 38A).

The Registrar will check whether the proposed terminating day would result in any overpayment to the payee. If so, the Registrar will contact the payee to discuss using a different terminating day.

Effect of an election to end collection

An election to end collection does not end the payer's liability to pay child support. Any amounts payable under a court order or administrative assessment continue to be payable to the payee rather than the Commonwealth. The payee can negotiate payment of the liability privately.

Effect of an election to end collection when there is a role reversal

There are certain circumstances (for example, a change in care) which create a role reversal. A role reversal results in the payee becoming the new payer, and the payer becoming the new payee. A liability as a result of a role reversal creates a new registrable maintenance liability which the Registrar must record on the Register (section 24A(1)) for collection. The new payee (or the payee and payer jointly) can elect for the Registrar to end collection of the liability (section 38A). Any previous election made by the payer or payee to end collection by the Registrar will not apply to the new liability created as a result of the role reversal.

Election for the Registrar to end collection of arrears

When a payee (or payer and payee jointly) elects for the Registrar to end collection of child support, they can also elect for the Registrar not to collect any unpaid amounts (arrears).

When there is no ongoing liability, the payee (or payee and payer jointly) can make an election for the Registrar not to collect any unpaid amounts (arrears).

A payee (or payer and payee jointly) cannot elect to have the Registrar continue collecting ongoing amounts of child support but stop collecting arrears.

If the payee is currently in receipt of more than the base rate of FTB Part A, the payee should consider the implications for FTB of their election for the Registrar to end collection of arrears. See FA Guide 3.1.6.70.

The Registrar to vary Register after an election to end collection of arrears

The Registrar will vary the Register to show that any arrears the payee (or the payer and payee jointly) have elected not to have collected are no longer due to the Registrar.

Effect of election for the Registrar to end collection of arrears

If the payee (or payer and payee jointly) elect for the Registrar to end collection of arrears, those arrears are still payable to the payee rather than the Commonwealth. The payee can enforce payment of the arrears privately.

The payee may apply for a liability (in some circumstances including arrears), to become enforceable again after they have opted out. See 5.6.3 for more information about reapplying for collection.

Ending a liability

If a child support assessment or a court-ordered liability ends because of a terminating event, but there are unpaid amounts for the period before the terminating event, the Registrar is still required to collect those arrears. The arrears are still a debt due to the Commonwealth (section 30) and are enforceable by the Registrar.

However a payee (or payer and payee jointly) can make an election for the Registrar to end collection of those arrears.

Changes to the liability after an election to end collection

The Registrar may vary a child support liability after that liability has ended or ceased to be enforced. This commonly occurs in child support assessment cases where a parent lodges their tax return and the Registrar is advised of the taxable income and uses this information to reconcile the parent's estimate election or to replace a default income.

If the Registrar varies a liability for the days before the specified terminating day, this can result in further unpaid amounts for the days before the specified terminating day. Child support arrears for a past period of the Registrar collection will be payable to the Registrar. However, the payee (or payer and payee jointly) can elect for the Registrar not to collect any arrears arising from subsequent changes to the liability. The Registrar will explain to the payee the possible consequences of an election to end collection of amounts payable under a child support assessment based on a default income or estimate.

Example: Samuel and Madina, a payer and payee, jointly elect for the Registrar to end collection of child support. At the same time, they elect for the Registrar not to collect unpaid amounts. Samuel and Madina's assessment is based upon Samuel's estimate of taxable income. The Registrar gives effect to Samuel and Madina's election by specifying a terminating day, which is the date of Samuel and Madina's election and varies the Register to show that the overdue amounts are no longer payable to the Registrar.

Three months later, Samuel lodges his tax return. It shows that Samuel's actual taxable income was higher than his estimated income. The Registrar reconciles Samuel's estimate and increases Samuel and Madina's child support assessment. Samuel must pay extra child support to the Registrar for the days before the specified terminating day. Samuel and Madina can make their own arrangements for paying the extra child support for the specified terminating day and all subsequent days.

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