Effective until 30 June 2008
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| CSA's previous online law & policy guide Effective until 30 June 2008 |
5.2.4: Collection from social security pensions and benefitsContext CSA can collect a payer's child support debt (other than a debt for spouse maintenance) by making deductions from social security pensions or benefits payable to that person (section 72AA). Legislation Section 72AA Child Support (Registration and Collection) Act 1988 Regulation 5E Child Support (Registration and Collection) Regulations 1988 Section 238 Social Security (Administration) Act 1999 Sections 23 and 1228 Social Security Act 1991 Explanation CSA can give written notice to Centrelink to deduct amounts from a child support payer's social security pension or benefit in order to collect that person's child support debt (section 72AA of the Registration and Collection Act). Section 238 of the Social Security (Administration) Act 1999 enables Centrelink to comply with the notice and forward the amounts to CSA. What is a 'social security pension or benefit'? When can deductions be made from pensions and benefits? Where a payment arrangement is in place Collection from other sources of income What is a 'social security pension or benefit'? The terms 'social security pension' and 'social security benefit' are defined in the Social Security Act (section 23 Social Security Act). They include the following payments.
Centrelink cannot make deductions under section 72AA from payments that are not listed above. However, payments from Abstudy may be collected by other means. When can deductions be made from pensions and benefits? Section 72AA deductions can be made in the following circumstances:
Section 72AA deductions cannot be used to collect:
However, Centrelink may recover a payee's debt to the Commonwealth by withholding amounts from the payee's social security payments (section 1228 Social Security Act). Payers with an ongoing liability arising under the Assessment Act Where a payer has an ongoing liability under a child support assessment and is receiving a pension or benefit, CSA can seek to collect child support payments from that pension or benefit. CSA will commence deductions from a payer's social security pension or benefit if they have an ongoing liability, and arrears and/or a poor compliance history. CSA will encourage a payer with no arrears of child support, and a good payment history to consider all their payment options:
CSA will inform a payer who elects to make private arrangements or pay CSA directly that it will take immediate collection action if they fail to comply with those arrangements. If the payer defaults, CSA will notify Centrelink to deduct the ongoing liability from the payer's social security pension or benefit without prior notification to the payer. Payers with child support arrears Where a payer has child support arrears and is receiving a social security pension or benefit, CSA can notify Centrelink to deduct amounts from that pension or benefit until the debt is paid. CSA can collect arrears arising in the following circumstances:
If a payer's court-ordered child maintenance liability has been suspended during a low-income non-enforcement period, CSA can continue to collect arrears from that payer's social security pension or benefit. Payer debts to consolidated revenue which are still debts due to the Commonwealth under section 30 can also be recovered from social security pensions or benefits. CSA will contact a payer by telephone to advise that it will start deductions from their pension or benefit. The exception is where the payer has elected to make other payment arrangements and was notified that CSA would commence deductions if they defaulted on those arrangements. If CSA does not make contact with the payer by telephone it will inform the payer in writing that it has notified Centrelink to commence deductions from their pension or benefit. The 'prescribed periodic deduction' is a maximum amount of $6.14 per week (regulation 5E). CSA will not collect amounts of less than $1.00 per week from a person's pension or benefit. If a payer's child support liability is less than one dollar per week, and there are no arrears, CSA will allow the amounts due to accumulate until it can instruct the Secretary to deduct an amount equal to the amount prescribed in the regulations. Where a payment arrangement is in place If a payer is complying with a satisfactory payment arrangement, CSA will not collect from their social security pension or benefit. Collection from other sources of income Collection from social security pensions or benefits does not preclude CSA from applying any tax refund that may become available to a payer's outstanding child support. Where CSA becomes aware of another source of income CSA will seek to collect the liability and arrears from that source. If employer withholding, employer withholding with arrears and section 72A are a more appropriate means of collection those collection methods should be considered. Parliament introduced section 72AA to provide a readily-available mechanism to collect child support liabilities and arrears from payers on a social security pension or benefit. CSA will defer collection due to hardship only in exceptional circumstances. CSA commences deductions from a payer's pension or benefit by giving Centrelink a written notice specifying:
CSA can issue the notice electronically or by any other means (section 72AA(3)). It is not required to provide the payer with a copy of the notice. Version 1.3 Issued 1 January 2007 |
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