Non Agency Payments
Released: 21 August 2007
This media backgrounder is intended as a tool to assist journalists
in understanding service delivery and legislative issues relating to child support.
When the Child Support Agency (CSA) transfers child support payments between parents, the paying parent can make some payments directly or indirectly to the receiving parent rather than through the CSA. This sort of payment is called a Non Agency Payment (NAP) and can be credited as child support towards the paying parent's child support liability.
These types of payments can help give paying parents the opportunity to direct how child support money is spent and allow for flexibility for both parents.
There are two types of NAPs
NAPs – Non Agency Payments; and
PNAPs – Prescribed Non Agency Payments.
NAPs
NAPs can be in the form of cash payments made directly
to receiving parents or third parties on the receiving parent's behalf.
A NAP can also be credited for the provision of other items or services, such
as lawn mowing or transfers of property to the payee. For a payment to be considered
a NAP both the paying and receiving parent must agree that the child support
liability would be paid this way.
PNAPs
Prescribed NAPs differ from NAPs in one important aspect;
the paying parent does not need the other parent's agreement for the
payment to be credited towards child support. As such there is no need for
the receiving parent to agree to the terms of the payment, though it is sometimes
less troubling for all concerned if parents can agree before the payment is
made. In these circumstances the paying parent must provide evidence of the
payment to the CSA.
Because of these provisions PNAPs can only be applied to a limited range of payments made to third parties. They include types of payments that are clearly for the benefit of the child(ren) or the receiving parent and are generally for costs that the receiving parent would otherwise have to pay for themselves. PNAPs include:
- child care costs for the child;
- essential dental and medical costs for the child;
- receiving parent's costs of maintaining a motor vehicle (insurance, panel beating, registration, repairs, service, tyres and other miscellaneous standing costs);
- receiving parent's accommodation costs (mortgage, body corporate fees, bond, rent, utilities and rates);
- schooling costs (including pre-school costs, books and uniforms);
From 1 July 2006 the Government increased the amount of child support that can be credited as a PNAP to 30 per cent of the monthly ongoing child support liability. In all cases the remaining 70 per cent of the child support liability must be paid before the CSA is able to credit the PNAP.
If the PNAP is more than 30 per cent of the monthly child support liability the excess is carried over into subsequent months, subject to the normal 70 per cent rule, until the total amount of the PNAP is credited.
For example, suppose that a paying parent's monthly child support liability is $1000. If they pay $1500 for their child's school fees they can have their monthly child support payment reduced by $300 (which is 30 per cent of their monthly liability) until the cumulative total of their deductions equals $1500. The parent must pay the remaining $700 before the $300 is credited. In the sixth month the child support payments return to $1000.
| Amount of child support liability paid after 30% deduction | Cumulative total taken off monthly liability | |
| 1st Month | $700 | $300 |
| 2nd Month | $700 | $600 |
| 3rd month | $700 | $900 |
| 4th month | $700 | $1200 |
| 5th month | $700 | $1500 |
Parents should notify the CSA by calling 131 272 or via CSA Online at www.csa.gov.au as soon as possible after a NAP or PNAP is made. This enables the CSA to apply the credit to the paying parent's child support liability amount. The CSA also recommends that parents keep a record of all payments. Records need to show the date and the amount that has been paid. When the payment is for a NAP the documentation should, where ever possible, be signed by both parents and clearly indicate that the payment was for child support purposes.
When parents make regular NAPs and PNAPs the CSA's customer service staff may discuss with the receiving parent the possibility of changing to private collection (see backgrounder on Private Collect). This is because regular ongoing payments outside of the CSA indicate that parents may be able to manage their child support payments themselves. Receiving parents who decide to change to private collect can still ask the CSA to enforce outstanding arrears and can elect to opt back in to CSA Collect in the future if the private collect arrangements break down.
If a child support case is Private Collect the paying parent can still have PNAPs recognised. They still need to pay 70 per cent of the monthly liability until the PNAP is used up. There is no need for either parent to notify the CSA in this situation, but they may contact the CSA for information.
Wherever possible it is always best for customers to contact the CSA on 131 272 to ensure that they get accurate and informed advice that relates to their specific circumstances from trained customer service staff.
Further information on Non Agency Payments
The Guide: http://www.csa.gov.au/guide/5_3.htmMedia enquiries
Call: 0434 605 144Email: media@csa.gov.au
