Effective until 30 June 2008
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| CSA's previous online law & policy guide Effective until 30 June 2008 |
5.6.1: Election to end collectionContext A payee, or the payee and payer jointly, may elect for CSA to end collection of the liability. They may also elect for CSA not to collect any arrears of child support. Legislative references Sections 38 and 38A Child Support (Registration and Collection) Act 1988 Explanation If CSA has registered a liability for collection, the payee can make an election that CSA end collection. The payee can also make that election jointly with the payer. CSA ends collection from a specified terminating day Effect of an election to end collection Election for CSA to end collection of arrears CSA to vary register after an election to end collection of arrears
An election to end collection can be made in writing or on a CSA form. CSA will also accept elections made over the telephone, unless there are specific circumstances in the case that suggest the customer should make the election in writing (See chapter 6.2 Collecting information, heading Form of applications). In such cases, CSA will require the person to make their election in writing and the telephone election is not valid. The election must specifically indicate that the payee (or the payer and payee jointly) choose for CSA to stop collecting child support. The election may specify a date from which CSA should cease to collect the child support, but this is not a requirement. The payee (or the payer and payee jointly) making the election can also elect for CSA not to collect any arrears of child support. CSA ends collection from a specified terminating day CSA must accept an election to end collection. CSA will vary the particulars in the Child Support Register (the Register) to show that the liability ceased to be enforceable from a specified terminating day. Specifying a terminating day CSA must specify a terminating day that is no more than 60 days after it received the election. The terminating day cannot be a day in a low income non-enforcement period.
CSA will check whether the proposed terminating day would result in any overpayment to the payee. If so, CSA will contact the payee to discuss using a different terminating day. Effect of an election to end collection An election to end collection does not end the payer's liability to pay child support. Any amounts due under the court order or administrative assessment continue to be payable to the payee rather than the Commonwealth. The payee can enforce payment of the liability privately. Election for CSA to end collection of arrears When a payee (or payer and payee jointly) elects for CSA to end collection of child support, they can also elect for CSA not to collect any unpaid amounts (arrears). A payee (or payer and payee jointly) cannot elect to have CSA continue collecting ongoing amounts of child support but stop collecting arrears. If the payee is currently in receipt of Centrelink payments, CSA will emphasise the importance of contacting Centrelink to ensure the payee understands the implications of their decision to end collection of arrears. When the payee is in receipt of more than the minimum Family Tax Benefit (FTB), they are required to meet the Reasonable Maintenance Action test under the Centrelink legislation. As a general rule, Centrelink will calculate the FTB entitlement on the assumption that the payee has received all privately collectable child support. This includes any amounts that were unpaid when the payee elected for CSA to end collection under the Registration and Collection Act. CSA to vary register after an election to end collection of arrears CSA will vary the register to show that any arrears the payee (or the payer and payee jointly) have elected not to have CSA collect are no longer due to CSA. Effect of election for CSA to end collection of arrears If the payee (or payer and payee jointly) elect for CSA to end collection of arrears, those arrears are still payable to the payee rather than the Commonwealth. The payee can enforce payment of the arrears privately. The payee may apply for a liability (in some circumstances including arrears), to become enforceable again after they have opted out. See reapplying for CSA collection. Ending a liability If a child support assessment or a court-ordered liability ends because of a terminating event, but there are unpaid amounts for the period before the terminating event, CSA is still required to collect those arrears. The arrears are an 'enforceable maintenance liability' and a debt due to the Commonwealth (section 30). CSA can 'discharge' arrears on an ended case if the payee (or payer and payee jointly) make an election for CSA to end collection of arrears. Changes to the liability after an election to end collection CSA may vary a child support liability after that liability has ended or ceased to be enforced. This commonly occurs in child support assessment cases where a parent lodges their tax return and CSA is advised of the taxable income and uses this information to reconcile the parent's estimate election, or to replace a default income. If CSA varies a liability for the days before the specified terminating day, this can result in further unpaid amounts for the days before the specified terminating day. Child support arrears for a past period of CSA collection will be payable to CSA. However, the payee (or payer and payee jointly) can elect for CSA not to collect any arrears arising from subsequent changes to the liability. CSA 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. Example M and F, a payer and payee, jointly elect for CSA to end collection of child support. At the same time, they elect for CSA not to collect unpaid amounts. M and F's assessment is based upon M's estimate of taxable income. CSA gives effect to M and F's election by specifying a terminating day, which is the date of M and F's election and varies the Child Support Register to show that the overdue amounts are no longer payable to CSA.
Three months later, M lodges his tax return. It shows that M's actual taxable income was higher than his estimated income. CSA reconciles M's estimate and increases M and F's child support assessment. M must pay extra child support to CSA for the days before the specified terminating day. M and F can make their own arrangements for paying the extra child support for the specified terminating day and all subsequent days. Version 1.1 Issued 28 July 2006 |
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