Collection and enforcement methods for Child Support
Where there is little or no evidence of a parent's commitment to meeting their Child Support responsibilities, or where there is evidence of fraud, we rely on enforcement activities to ensure we achieve the best outcome for children, parents and taxpayers.
Employer deductions of arrears
For convenience, a paying parent can choose to have their Child Support payments automatically deducted from their pay on a regular basis.
However, if you refuse to pay your Child Support or enter into a satisfactory payment arrangement, we will ask your employer to make Child Support deductions from your pay.
Enforcing tax return lodgement
We work hard to ensure the incomes we use in Child Support assessments are correct. We work closely with the Australian Taxation Office (ATO) to improve the rate and timeliness of parents' tax return lodgements. This ensures Child Support calculations are more accurate and it reduces the number of assessments calculated using default incomes.
All Child Support parents (not just paying parents) must lodge a tax return unless they are exempted by the ATO. However, exempted Child Support parents may still be required to lodge a 'Non Lodgement' advice with the ATO. Information regarding tax return lodgement requirements is available on the Australian Taxation Office website.
Intercepting tax refunds
Most Child Support parents are Australian taxpayers. The ATO advises us when a tax refund is available to a Child Support parent and is about to be paid. We may take the refund and apply it to meet an outstanding Child Support payment.
Intensive debt collection
We are extending our intensive debt collection activities to include an additional 22,500 parents a year. We plan to intensively manage more parents who have outstanding payments that have proven difficult in the past to collect.
Issuing overseas travel bans
If a paying parent plans to travel overseas, has overdue Child Support and refuses to work with us to pay the overdue amount, we can prevent them from travelling overseas by issuing a Departure Prohibition Order.
A DPO is an administrative order that prevents a parent from leaving Australia until they pay their overdue Child Support or negotiate a satisfactory payment arrangement.
We do not need a court order to prevent a customer from leaving Australia.
Where other enforcement methods have not worked and where an asset or income stream is identified in the customer's name, we'll take parents to court to collect outstanding Child Support payments.
In our more serious cases, we may also use optical surveillance to help us investigate complex avoidance arrangements.
Prosecution is an option available to us for the most serious actions or omissions involving criminal behaviour by customers and employers.
Minimising income to increase or decrease Child Support payments
We match data from other sources and act on tip-offs to identify customers whose income does not match their lifestyle. We then undertake financial investigations to ensure that parents are paying and receiving the right amount of Child Support. If you are minimising your income, we can find out about it and you may be required to repay Child Support.
Areas of income minimisation we are investigating include:
- either parent earning income in the 'cash economy'—for example, ‘cash in hand' from the building, domestic help and other industries
- parents earning their income as non-salary or wage—for example, business or investment income
- using corporate veils (companies, trusts or partnerships) to hide or reduce taxable income, which results in minimising Child Support obligations
- parents who legitimately reduce their taxable income and fringe benefits—we can add these amounts back on to establish a more accurate Child Support assessment