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CSA spends Over $565 000 in Legal Costs to chase a Dad for a debt of $ 6000

Hi All,

Not sure many would have seen this, but I recently found this article that makes interesting reading and long confirms what I, as many others suspect about the extent the CSA will go too, to cover their "Backsides", especially when they get it wrong.


Department of Human Services' secret seven: lawyers battle over the details of an expensive child support dispute


http://www.theage.com.au/national/public-service/department-of-human-services-secret-seven-lawyers-battle-over-the-details-of-an-expensive-child-support-dispute-20150225-13n8tj

I found this article, as I find myself in a similar situation and was self researching how to mount my defence against the CSA as they have taken action to 'force the sale of my Home"…. their words… Legal Aid and the Community  Legal Centres in WA do not provide assistance to matters involving the CSA.

Not withstanding that  over the course of nearly 6 years with heaps of "crazy' decisions, all bias to inflate the "Payer's liability, I have offered to settle on the June 2014 statement which is $ 6619… From June 2014 to December 2014, the CSA have added over $ 12 000 in debt. (they have used an income of $ 174000 where it was $ 29 980, from just an "Average Joe" battler trying to get back in his feet.

In my case, the CSA are outlined they will continue for the whole amount… .

In these times, when the Federal Budget is tight, surely within the Commonwealth Public Service, there should be some sort of Checks and balances put in place to ensure unnecessary costs are being incurred simply to chase a rabbit down every possible hole there is.

Surely, there would be a cost analysis conducted compared to outcomes, considering further costs and time the Commonwealth could spend ensuring they over well know issues with their Systems.. IE: the email notification of CSA online has been flagged as an issue for nearly 3 years and is under "urgent' attention, yet I see no change… Then when you do log in, you may find as a result, you have missed a deadline to "respond', object" "appeal", all because their system doesn't notify you when you have correspondence in your in box from the CSA.

Taxpayers are now paying for seven lawyers to help the federal government keep details secret of a $6000 child support dispute that has now cost taxpayers more than $565,000 in legal fees.

But despite its expensive taxpayer-funded legal team, the giant Department of Human Services could have its case thrown out because of a failure to properly fill in a simple form.

The Administrative Appeals Tribunal has been told that high-end law firm Clayton Utz, hired by the department, failed to properly complete the tribunal's application form, designed for ease of use by people with no legal training.

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The legal firm is battling to overturn an order from the government information watchdog to the department to hand over documents to a father who has spent four years disputing a Child Support Agency orders that he pay $6000 to his ex-wife.

Fairfax Media revealed last year that Child Support Agency bosses had spent more than $500,000 despite knowing, since August 2011, that their public servants broke the law in the man's case and were on shaky legal ground from the beginning of the dispute.

That figure is now expected to grow even further with DHS still fighting the father, a determined litigant known only as DT because of the strict privacy provision surrounding family law, in both the Family Court and the AAT.

The department's legal teams, all paid for by taxpayers, include a barrister, a special counsel from Clayton Utz, a principal solicitor from the firm, a senior lawyer from the Australian Government Solicitor's office and a more junior colleague and two instructing solicitors from Human Services.  

In addition to the Administrative Appeals action, the department is also battling in the Family Court to block the father's access to key departmental documents in the case, which has been described by independent Senator Nick Xenophon as a  "scandalous waste of taxpayers' money … to protect the butt of the department".

In its application to the AAT, the department's lawyers said the decision of the Australian Privacy Commissioner ordering the department to hand the documents over to the father was wrong, but failed to articulate why it was wrong.

DT argued in a hearing in Sydney on Monday that the failure to make out its application properly meant that the case should be thrown out.

In its defence Clayton Utz submitted that under the relevant legislation, it does not have to answer the section of the application form asking for the reasons for the administrative challenge.

Deputy President James Constance reserved his decision while a judgement in the Family Court case as reserved in February 2014.

A Human Service spokeswoman declined on Tuesday to discuss her department's conduct of the case.

"As this matter is still subject to ongoing litigation action at the Administrative Appeals Tribunal, it is not appropriate for us to comment on any aspects related to this case," she said

Last edit: by OneRingRules

Another costly Child Support case in the making !

With a case that has been running for some years now in WA I can see yet another one of these extraordinary high cost collections coming up.

Here is what Senator Xenophon had to say to the Senate estimates committee - Hansard Wednesday 3rd June.

CHAIR: We will recommence. What we are proposing to do is Senator Xenophon has some questions around the Child Support Agency, so we might deal with those questions, and then Senator Cameron will go back to some other areas. Senator Xenophon.

Senator XENOPHON: I will be relatively brief. Ms Campbell, I just want to talk in general terms and put this to the minister. I understand I will be having further discussions with the department and the minister about the broad principles as well, so I will be somewhat circumspect. If I can go to the 2008 Ombudsman report titled Child Support Agency, Department of Human Services: Responding to allegations of customer fraud. The report was initiated because: 'A growing number of complaints to the Commonwealth Ombudsman have raised concerns about the way in which the Child Support Agency, CSA, responds to allegations that one of its customers has provided false or misleading information. ' I know that that is seven years old, and I am happy to get an update from the department in respect of that. It did make some criticisms that the department was wanting with respect to its response when a parent made an allegation that the other person was not telling the truth. The Ombudsman made the statement that the integrity of the child support scheme hinges on the reliability of the evidence on which child support assessments are made, and that it is a core function of the CSA to uphold that principle. Does the department disagree with the Ombudsman's opinion, Ms Campbell?

Ms Campbell: I do not have the Ombudsman's report. Unfortunately I was not in the department in 2008.

Senator XENOPHON: I am not suggesting you were.

Ms Campbell: I will just ask someone to grab it for me so I can see it before I respond.

Senator XENOPHON: Okay. If I can quote directly from the report: 'The integrity of the Child Support Scheme hinges on the reliability of the evidence on which child support assessments are made. ' And it is a 'core function of the CSA to uphold that principle'. I am reading directly from the report.

Ms Campbell: Is that a statement by the Ombudsman?

Senator XENOPHON: It is a statement by the Ombudsman. If you assume for the purpose of the question that I am reading to you a direct statement from the Ombudsman. If that was a statement by the Ombudsman, would that be a principle with which you would agree?

Ms Campbell: I would like to see the context of the quote, and that is why I am trying to get the report, because I was not there in 2008.

Senator Payne: I am not immediately familiar with all of the aspects of that report either.

Senator XENOPHON: It is at page 1 of the executive summary, and maybe I could ask the secretary to run off a couple of copies so that there is no confusion. Can I just speak to you as a general principle?

CHAIR: We might come back to that.

Senator XENOPHON: I think that might be better, Chair. I do not want to put the minister or the agency at any disadvantage.
CHAIR: We will come back to that in a little while. I will go to Senator Cameron.


Later …

CHAIR: I will just go to Senator Xenophon as we said we would at 1.30, but I know Senator Siewert has more questions on fraud, so we will come back to fraud, if you like. I have some questions on fraud as well. We will go to Senator Xenophon on Child Support.

Senator XENOPHON: If I can indicate, Ms Campbell, on the last occasion I referred to a specific case. I do not intend to refer to that case. I think it is appropriate at this stage not to. I did get a letter from a resident of Western Australia about a matter which I might refer to obliquely, because I think I was copied in on that. But I might refer to that in the most general of terms. Going back to the Ombudsman's report—and I am sorry I did not provide that to you earlier—the report is seven years old and it related to responding to allegations of customer fraud in the Child Support Agency. The Ombudsman made the statement that the integrity of the Child Support scheme hinges on the reliability of the evidence on which child support assessments are made and that it is a core function of CSA to uphold that principle. I am happy to put this to the minister. As a general principle, that is an unobjectionable reasonable statement?

Ms Campbell: That we should, to the best of our ability, ensure the integrity of that information, yes.

Senator XENOPHON: It is a question of what systems you have in place to try and effectively do that.

Ms Campbell: Indeed.

Senator XENOPHON: The Ombudsman went on to say that 'quality child support assessments rely on the ability of the agency to make people tell the truth and that, if it fails to do that, no decision it reaches can be free from doubt. That is in the report.

Senator Payne: Is that in the conclusions?

Senator XENOPHON: It is. I will just give you the specifics. I did have the executive summary. I am sorry, that was a more general statement in relation to that. As a general principle, in going back to the original statement of the Ombudsman's report, if there are prima facie allegations of false and misleading information being tendered as part of the CSA inquiry, it is a matter that is being sorted out perhaps not harshly but formally by the CSA. So, what happens if a statement is made not necessarily intentionally but recklessly or carelessly by one party? How do you deal with that? I know it is a very difficult area, but what protocols do you have in place to deal with those statements?

Ms Campbell: I will see whether we can find someone who has more knowledge about how we deal with it. Mr Withnell has taken responsibility for the fraud elements, but I think your question is more about day-to-day operations.

Senator XENOPHON: I will just put it in context. The Ombudsman made this observation in the report at page 7:
Centrelink, another service delivery agency within the DHS portfolio with 6.5 million customers, carried out 42,000 fraud related investigations in 2006-07 financial year. This translates to approximately one investigation for every 155 Centrelink customers. By comparison CSA's ratio of fraud investigations is one investigation for every 93,333 customers.

That was an observation made at page 7 of the Ombudsman's report, and then it made a number of observations of when there were matters last prosecuted for fraud under Child Support. They go back to 2007, 1998 and in February 2000.

Ms Campbell: I do not have comparative numbers for 2014 or 2015 at the table.

Senator XENOPHON: I am happy for you to take that on notice.

Ms Campbell: I think we might need to take it on notice. I understand the question, but unfortunately I do not have those numbers here.

Senator XENOPHON: I am relying only on the Ombudsman's report of 2008 that there seems to be a much lower ratio of fraud investigations with one for every 93,000 plus customers compared to one for every 155 Centrelink customers. That could say something about whether there are—

Ms Campbell: That was in 2008?

Senator XENOPHON: 2008; that is right. I am just trying to work out where the ratio is.

Ms Campbell: I hate to make—

Senator Payne: They are quite different environments.

Ms Campbell: Yes. Things have changed quite significantly since 2008 in Child Support. We have many more customers who have private collect relationships than in 2008 where they work it out. They use the formula. They work it out amongst themselves.

Senator XENOPHON: I am happy to take it on notice to show that obviously things have changed significantly.

Ms Campbell: Things have changed and I think it would probably be better for us to get more up-to-date information to give you a much more accurate answer.

Senator XENOPHON: And if you could take on notice an update on CSA referrals to the DPP with respect to section 119 and sections 159 and 159A on the collections provisions.

Ms Campbell: Yes.

Senator XENOPHON: Do you have any idea of what the trend has been?

Ms Campbell: No, I do not have that information. I do not think that there are any officers at the table with that.

Mr Withnell: In terms of referrals to the CDPP, it is a bit up and down year on year, obviously as many of these things are, but certainly in 2013-14 we referred 29 matters to the CDPP in relation to child support.

Senator XENOPHON: So, there is quite significant change from the Ombudsman's report?

Mr Withnell: Correct.

Senator XENOPHON: Can I just point out that Senator David Johnson sought similar answers in 2012. That was question on notice 2159 of October 2012. If I can just refer you to that, because I think the answer to Senator Johnson's question back then was that no matters had been referred to the Commonwealth DPP under sections 159 or 159A of the Child Support Assessment Act of 1989, so it seems that the numbers vary.
In terms of general protocols—and this is not about being punitive—sometimes there might be sloppiness on the part of one of the parties that is not deliberate and it is not even reckless, but there has been perhaps a carelessness in terms of information provided that then leads to a chain of events with all sorts of consequences. What happens in terms of protocols when a customer makes an allegation if not of fraud then of inaccurate or misleading information being provided? I am trying to couch this in fairly gentle terms because that seems to me to be the nub of this.

Mr Volkers: There are a number of mechanisms in the Child Support Scheme. One of the most basic, fundamental ones is that there are two parents always involved in this process so the scheme itself has an almost built in checks and balances mechanism. Many of the issues that are raised by one party will be checked with the other. For example, it might be a change in care so one person will notify us of that change in care. We talk to the other party to check that. Then if there is a dispute we gather evidence and make a decision. That is analogous to a lot of the processes that happen in the Child Support Scheme.

Senator XENOPHON: Is that what happens as a matter of course? Could there sometimes be circumstances where an allegation is made or an assertion is made as to what one partner's income is or their circumstances, the other partner disputes that but there might then be a chain of events that ensues in the absence of having an ability to test the two assertions?

Mr Volkers: I have just used the care example there. In income we will obviously always have the ATO to use as the ultimate in a sense arbiter of what the right income is. We get that daily download from the ATO about the latest income information. If a customer wants to put in an estimate of income, if their income changes, which is an important provision in the scheme to allow us to have the flexibility and respond to a person's change in circumstances, but if they want to put in an estimate we will also look for some information from them to support and accept the estimate that they provide for us. Any change that we make to the assessment notice is issued to both the parents to say, 'This is what we have changed.' Then there are objection rights that are involved and checks and balances in the system in that sense.

Senator XENOPHON: What deterrence is there? I am not necessarily talking about prosecuting people. If a statement has been made that has been reckless or deliberately wrong—and it can be a very highly charged environment—what deterrence is there firstly and what mechanisms are there to try to correct that and perhaps a sanction? I am not necessarily talking about dragging someone through the court and having a conviction to their name, but what mechanisms and what deterrences are there with respect to that?

That leads to another question, which may be a question for the minister. Is this something that needs to be considered, whether there is an alternative approach or something that is less harsh than the current legislation but an easier way with not the same onus of proof that leads to the same outcome; that is, to have a fair assessment?

Mr Volkers: The ultimate penalty in that sense would be once we have obtained the correct information—and let us say we use the income as an example, which is obviously a common one—when we find the correct incomes the assessment is backdated correctly. The new amounts are generated and the penalties are applied to that amount.

Senator XENOPHON: Or conversely, if the information that you are given is that the income is X but it is only half X, what happens then? In other words, if the information given was exaggerated in terms of income?

Mr Volkers: That is quite an unlikely scenario in terms of a paying parent. That would be maybe a receiving payment in that case and essentially it is in reverse. The same sort of situation happens. The assessment goes down and the person has an overpayment. The receiving parent in that case would have an overpayment. That is the checks and balances in the system itself. Probably the main thing that we see is along the lines of non-compliance with a notice or gathering information from third parties. We use those different elements to provide—

Senator XENOPHON: I am coming towards the end. If it is possible to get how it works in terms of the mechanisms with both sides, because there are two sides to a coin. I have constituents who complain to me. Women who have ex-husbands, fathers of their children, who seem to be very well off but because of the way they have set up their affairs through family trusts they get away with paying next to nothing for their kids and then there is the flip side where sometimes the other side happens, although the former seems to be more common than the latter in terms of some men being able to arrange their affairs in a way that they are paying little or nothing in terms of child support, which I find repugnant.

Finally, there is a matter that I was cc'd into from a Western Australian resident that was sent to you, Ms Campbell. I am not going to go into too much detail. I might write to you about it. I am sure that you get squillions and probably more than most of us senators in terms of correspondence, which is a lot. I want to be very careful about it. I just want to talk about general principles. It was sent on 28 May. I was copied into it for my sins, I think probably for asking questions in this field.

There was an issue of arrears, an assertion of formal arrears of about $17,800. The case officer conceded a quick review would put the arrears at around $10,000. The customer thought it should be about $3,000. An offer was made of about $6,600. Now there are enforcement proceedings for the full amount when it seems that the case officer considered that it should be a lesser amount. I am very careful. What I am trying to understand is in cases where there appears to be an opportunity to sit down with the parties and where the case officers or the department thinks there is a fair way of resolving this without the cost of a prosecution or enforcement proceedings, what flexibility is there to achieve a fair outcome, particularly for the children?

Ms Campbell: I have received that correspondence and sent it to Mr Volkers to respond to.

Senator XENOPHON: I am not asking specifically. I might write to you separately. It is the general principle. He says the case officer said, 'This is the upper limit. You are only a bit over half that we think.' He says a lesser amount. Do you try to save enforcement costs? Is there an informal mechanism or a mechanism to try to resolve these matters more expeditiously?

Mr Volkers: Absolutely. The way we address all issues in Child Support is that it is an escalated approach. Firstly, it is best if people are not in that debt situation in the first place, but once they are we will talk to them and try to arrange for a suitable payment arrangement. We have guidelines around that. Our staff are trained in having conversations around those things with our customers and set up an arrangement that meets the person's needs but also within the requirements. We are dealing with another person's money here. We want to make sure that the receiving parent has the money to support the kids. Then it is graduated. It might go then to us using more of our notice powers and getting information from third parties or getting payments from third parties. The ultimate is things like litigation action when we take them through court or departure prohibition orders and the like. Those are all at the end of the spectrum. We are always looking to try to get an agreed outcome, even when we are going through a litigation process.

Senator XENOPHON: I know it is a very difficult field. I will put some questions on notice through you, Chair, in terms of issues of legal costs and how much is spent in relation to that about this particular matter that I raised at the last estimates. I look forward to having a discussion with you, Minister, later this week.

Senator Payne: In relation to the recommendations in the Ombudsman's report of 2008, I will also ask the department, in putting together the responses to the questions that we have taken on notice, to put a summary of actions taken since then in the fraud area in particular.

Senator XENOPHON: That would be very helpful.

I am aware of the case in WA and had something to say about that in the Canberra Times recently.

The matter goes to court early July. This case has been running over four or more years where the Child Support (Previously Agency) were never able to correct the errors in the assessment, where there were incorrect salaries used to estimate income, where there was a write only client that had errors in the communication method and where the On-Line Child Support system completely failed this payer due to a number of documented errors including the loss of previous statements and the inability of the case officer to reconcile the account. At the time we wrote to the operations people in CS with a large list of errors in relation to the on line system.

The issue was before the WA Ombudsman who also never really understood the complexities and errors of the case. I did not get to read the final report from the Ombudsman.

These sorts of things take so much time to resolve that they fall off the table, are impossible to document fully because of the incredible time impost on the affected payer and at the end of the day most payers just give up, or forget they ever had children or commit suicide. This is the reality of the situation when errors in calculation are so far back in the time line which are compounded going forward and are only ever partially resolved. Often the pressure of dealing with the phone calls , many countless letters (which are never properly identified so that you can respond to them individually) and other assessments on tip of unresolved assessments compounded as well with dealing with difficult contact issues through courts, mean it is impossible to hold down an ordinary job.

There has to be a better way to deal with the Change of Assessment and the way Child Support works.
 

Executive Secretary - Shared Parenting Council of Australia
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