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.

8.1.1 Overpayments

Context

Amounts paid in relation to a child support assessment (1.1.C.70) and/or a registered maintenance liability may exceed the amount that a person was entitled to receive under that liability. The treatment of overpayments (1.1.O.20) varies depending on the type of liability and how the overpayment occurred.

An overpayment in relation to an amount under the CSRC Act can create a carer debt (1.1.C.30) which arises where a payee (1.1.P.30) of a registered maintenance liability receives or is taken to have received a disbursement (1.1.D.60) to which they were not entitled.

Overpayments often relate to a liability arising under a child support assessment (for example, where that assessment has been retrospectively amended). However, an overpayment may also relate to a liability arising under other registrable maintenance liabilities (1.1.R.40).

On this page

  • Agency collect (1.1.A.50) - overpayments which are recoverable by the Registrar (carer debts)
  • Methods of recovering carer debts
  • Agency collect - overpayments which are not recoverable by the Registrar (carer debts)
  • Overpayments in private collect (1.1.P.110) arrangements

Agency collect - overpayments which are recoverable by the Registrar (carer debt)

A carer debt arises where the payee of a registered maintenance liability is paid an amount, or is taken to be paid an amount because of a debt offset and the payee was not entitled to be paid the amount (including because the registered maintenance liability was retrospectively varied).

A carer debt is due to the Commonwealth and recoverable by the Registrar. The payee of the registered maintenance liability is the payer (1.1.P.40) of the carer debt and has a carer liability. Where applicable, amounts recovered by Services Australia in relation to the carer debt are paid to the payer of the registered maintenance liability (the payer of the registered maintenance liability is the payee of the carer 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 retrospectively changed to $800. This results in a carer debt of $200. Services Australia contacts the payee of the registered maintenance liability and explains that they owe a carer debt. The payee pays the amount of $200 to Services Australia.

Note: Different rules apply if the overpaid amount arises because of a decision that the registered maintenance liability should never have existed or because of the payer of the liability ceasing to be a resident of Australia (1.1.R.100) or a reciprocating jurisdiction (1.1.R.10) (see Agency collect - overpayments which are not recoverable by the Registrar).

Act reference: CSRC Act section 69B(1) to (3) Overpayments of payees

Policy reference: CS Guide 8.1.6.10 Offsetting debts between payers & payees

Methods of recovering a carer debt

The Registrar may recover a carer debt using most of the same powers that are available to collect child support debt. A carer debt may be recovered by the following methods:

  • offsetting the debt against ongoing child support liabilities or debts between payees and payers
  • reducing carer debts when other debts are paid back
  • the payee making a payment to Services Australia
  • collecting through employer withholding (1.1.E.20) (7.4.3)
  • collecting from Australian Government payments (7.4.4)
  • applying a tax refund for the payee against the debt (8.3.1)
  • collecting from third parties (8.3.2)
  • issuing a departure prohibition order (8.3.3)
  • applying to a court for an order to enforce recovery of the debt (8.4).

A payee of a carer liability (who is the payer of the relevant registered maintenance liability) can privately enforce a carer debt in court only by instituting a proceeding under the CSRC Act.

Act reference: CSRC Act Part IV Collection by deduction from salary or wages, Part V Payment and recovery of child support debts and carer debts, section 113A Recovery of debts by payees

Policy reference: CS Guide 8.1.6.10 Offsetting debts between payers & payees, 8.1.6.20 Reduction of debts when other debts paid back, 7.4.3.10 Employer withholding – paying from salary or wages, 7.4.4.10 Payment from social security pensions and benefits, 7.4.4.20 Payment from family tax benefit, 7.4.4.30 Payment from veterans’ pensions and allowances, 8.3.1 Tax refund intercepts, 8.3.2 Collection from third parties, 7.4.4.40 Payment from parental leave payments, 8.3.3.10 Departure prohibition orders, 8.4.6 Payee’s right to enforce debt via court proceedings

Agency collect - overpayments which are not recoverable by the Registrar

An amount is not repayable by a payee of a registered maintenance liability and is not a debt due to the Commonwealth if:

  • the payee was not entitled to be paid the amount because the registered maintenance liability was subsequently retrospectively varied and that variation was because
    1. a decision is made that the registered maintenance liability should never have existed, or
    2. the payer of the registered maintenance liability stopped being a resident of Australia or a reciprocating jurisdiction

In relation to point (a) – this commonly arises where a court has made a declaration that a person should not be assessed in respect of the costs of the child because they are not a parent (1.1.P.10). The effect of such an order is that the relevant application for administrative assessment (1.1.A.30) is taken never to have been accepted.

If a court makes a recovery order (1.1.R.30) 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) this liability can be registered for collection.

A court with jurisdiction under the CSA Act can make a recovery order in relation to amounts paid under registered maintenance liabilities which originate outside the CSA Act but are collected under the CSRC Act.

Act reference: CSRC Act section 69B(2) Overpayments of payees

CSA Act section 143 Amounts paid where no liability to pay exists etc.

Policy reference: CS Guide 8.4.7 Recovery orders

Overpayments in private collect arrangements

An overpayment in a private collect period is not a carer debt under the CSRC Act.

An overpayment amount may be privately recovered if:

  • both parties agree that the payee is to repay the amount to the payer as a voluntary acceptance or settlement for repayment
  • subject to the rules in CSA Act section 143, a payer obtains a recovery order in court (which may be registered for collection under the CSRC Act)
  • 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).

Act reference: CSA Act section 143 Amounts paid where no liability exists etc.

Policy reference: CS Guide 8.4.7 Recovery orders

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