The Legal Practitioner's Guide

4.4.5 Discharging arrears

The Assessment Act does not make provision for parents or a court to discharge arrears payable under a child support assessment. However, where this outcome is sought, it can be achieved by an agreement or order that sets the rate of child support at an amount equivalent to the amount already paid.

As the amount payable under an agreement designed to extinguish arrears will always be lower than the amount that was payable without the agreement, any such agreement will need to be a binding agreement, made with legal advice. (Limited agreements made for a past period must be for at least the amount payable over that period.)

The implications for Family Tax Benefit should be considered when making such an agreement. The parent who is owed the arrears should contact Centrelink to discuss the circumstances before making an agreement to "discharge arrears", and the effect will need to be considered in the legal advice provided to the parents.

Note: Particular care needs to be taken to identify the correct child support period(s) concerned to ensure the arrears are extinguished and that no overpayment results. A clause stating this may be appropriate – see example below.

Departure order

• That pursuant to section 117 of the Child Support (Assessment) Act 1989, there be a departure from the administrative assessment of child support payable by [Parent A's name] for the child(ren) [child(ren)'s names] as follows:

• For the period from [start date] to [end date], the total amount of child support payable is $x*.

*Where $x equals the amount of child support that has already been paid for the stated period including the value of any non-agency payments credited for that same period.

OR

• For the period from [commencement of the child support liability] to [date of order], the total amount of child support be set equal to the monies already paid for that period, including the value of any non-agency payments credited for that same period, with the effect that no arrears remain payable and no overpayment is created.

This wording is useful where orders are sought without knowing the dates of the relevant child support period/s and/or where the amounts paid in respect of different child support periods is unknown. Whilst this clause doesn't set an actual rate (as in a $ rate) it does provide the CSA with a precise method of calculating a rate which will not leave any arrears owing nor create an overpayment thereby giving the desired outcome.

Child support agreements

[Parent A's name] and [Parent B's name] agree that [Parent A's name] is liable to pay [Parent B's name] a total amount of child support of $x* for the child(ren) [child(ren)'s names] for the period from [start date] to [end date].

*Where $x equals the amount of child support that has already been paid for the stated period.

OR

• [Parent A's name] and [Parent B's name] agree that [Parent A's name] is liable to pay child support to [Parent B's name], for the child(ren) [child(ren)'s names] for the period from [commencement of the child support liability] to [date of agreement], with the total amount being equal to the monies already paid for that period: with the effect that no arrears remain payable and no overpayment is created.

Tips and problems

Finding out how much has been paid
Contact CSA for details of the total amount of child support that has already been paid in the case. CSA can provide this information over the telephone to either parent or their authorised representative.

What if the payee has a debt to CSA for overpaid child support?
Usually the amount that has been paid to the payee will be the same as the amount that CSA has collected from the payer. If, however, the payee has a debt to CSA for overpaid child support (section 79 Registration and Collection Act), he or she will have received from CSA more than he or she was entitled to receive from the payer. A payee's overpayment (which is owed to the Commonwealth and not the payer) cannot be 'discharged' in the same way as a payer's child support arrears. The payee will still be obliged to repay any debt they owe to the Commonwealth, even if an order or agreement discharges the arrears of child support that the payer owes to CSA. In limited circumstances, a person may be able to have the debt waived by the Minister for the Department of Finance (see chapter 6.11.2 of The Guide: CSA Law and Policy).

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