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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.

8.1.7 Election to end collection of arrears

Context

If a payee (1.1.P.30) (or payee and payer (1.1.P.40) jointly) has made an election for the Registrar to end collection (they opt out to private collect (1.1.P.110)), the payee may also elect for the Registrar to not collect any child support (1.1.C.60) arrears (1.1.A.100). The payee may apply for a liability (in some circumstances including arrears), to become enforceable again after they have opted out. See 7.4.1.10 for more information about reapplying for collection.

On this page

  • Election for the Registrar to end collection of arrears
  • Varying the Register after an election to end collection of arrears
  • Changes to the liability after an election to end agency collect

Election for the Registrar to end collection of arrears

A payee can elect for the Registrar to not collect any unpaid amounts from an agency collect period (arrears) if an agency collect arrangement ends because:

  • The payee elects for the Registrar to end collection of child support (they opt out to private collect – see 7.3.1.10)
  • A terminating event ends a child support assessment (1.1.C.70) or a court-ordered liability

When a payee elects for the Registrar to end collection of arrears in either of these circumstances, the arrears become payable to the payee rather than the Commonwealth. The payee becomes responsible for enforcing the payment of arrears privately.

When a payee elects for the Registrar to end collection of child support (agency collect (1.1.A.50)), or if a child support assessment or a court-ordered liability ends because of a terminating event, the payee can elect for the Registrar to not collect any unpaid amounts (arrears). This election means the arrears are payable to the payee directly rather than the Commonwealth. The payee can then enforce payment of the arrears privately.

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 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.

Act reference: CSRC Act section 38 Variation of Register to have enforceable …, section 38A Election by payee or by payee and payer jointly

Varying the Register after an election to end collection of arrears

The Registrar will vary the Register to show that any arrears the payee has elected to not have collected are no longer enforceable by the Registrar.

Act reference: CSRC Act section 24A Registrar to register liability…, section 38 Variation of Register to have enforceable maintenance liability no longer enforced under Act, section 38A Election by payee or by payee and payer jointly

Changes to the liability after an election to end agency collect

The Registrar may vary a liability after it has ended or ceased to be enforceable (agency collect). This commonly occurs when a parent lodges their tax return and the Registrar uses this information to reconcile the parent's income estimate (2.5.1) or to replace a provisional income (1.1.P.130).

If the Registrar varies a liability that accrued during an agency collect period, this can result in further unpaid amounts for that period. Child support arrears for an agency collect past period will be payable to the Registrar. However, the payee 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.

If the payee is 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.

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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