5.2.5: Collection from Family Tax Benefit

Context

CSA can require the Secretary of the Department of Families, Community Services and Indigenous Affairs to make deductions from Family Tax Benefit payable to a person for a child, and apply these amounts to that person's child support debt for that child.

Legislative references

Sections 17, 30 and 72AB Child Support (Registration and Collection) Act 1988

Explanation

A payer who provides at least 10% of the care for a child for whom they pay child support can be paid Family Tax Benefit (FTB) for that child. The payer can choose to receive their FTB entitlement as periodic payments or after they lodge their tax return.

If the payer has a child support debt for a child for whom they will receive FTB, CSA can give notice to the Secretary of the Department of Families, Community Services and Indigenous Affairs (the Secretary) requiring deductions from that FTB entitlement. This may reduce the payer's FTB entitlement to nil. Any amounts deducted are sent to CSA and applied to the payer's child support debt.

Deductions from FTB are available only to collect child support debts owed by a payer for a child for whom they will receive FTB. The Secretary will not deduct any amounts from the FTB payable to a payer for any other child. Nor can CSA recover child support debts (or child support related debts) of the following types from a payer's Family Tax Benefit:

spousal maintenance;

an amount repayable by a former payee under a registered parentage overpayment order;

payee overpayments;

estimate or late payment penalties; or

fines or costs ordered by a court.

Before CSA can issue a notice requiring the Secretary to make deductions from the payer's FTB to recover a child support debt for a child, the due date for payment must have passed and there must be amounts overdue. A notice can have an ongoing effect on periodic FTB entitlements until the child support debt is met or the notice is withdrawn.

Where a payment arrangement is in place

Where a payment arrangement is already in place and the payer is complying with that arrangement CSA will not collect from FTB payments unless the payer defaults on the arrangement.

Collection from FTB does not preclude CSA from applying any tax refund that may become available to a payer's outstanding child support.

Contacting the customer

CSA will advise a payer when it notifies the Secretary to commence deductions from their FTB payments. CSA will do this by telephone. Where telephone contact cannot be made CSA will inform a payer by letter.

Issuing a notice

CSA commences deductions from a payer's FTB payments by giving written notice to the Secretary specifying:

the payer's name,
the name of each child for whom child support is owed,
sufficient details to allow the Secretary to identify the payer and each child,
the maximum amount that can be deducted, and
the day or days on which deductions are to be made (section 72AB(4)).

CSA will notify the payer that collection action has commenced. The decision to issue a notice to the Secretary under section 72AB(3) is an appealable refusal decision. (See chapter 4.1.3)

Version 1.2

Issued 1 January 2007

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	CSA's previous online law & policy guide Effective until 30 June 2008