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Will I be compensated for having overpayed this financial year??

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I have one of our children fulltime, "payee" has two

I have had full custody of my eldest(10) since March2010 as my ex was struggling with him and had just started a fulltime government position(contract). As my ex had only been in the position for a few months before end of financial year, her taxable(not total) income had only raised from 15k to 21k which only just took her over the exempt income threshold so only made $1pf difference in the agreement. Her position was actually worth 52k but C$A advised there was no way they would take this into account and would only rely on the 09/10 return and would not change this even if it was of benefit to her should an overpayment have to be credited later on.  Now that I have read differently here about their opinion vs what is actually an option that is a non issue. It is also lucky as her position was contracted until 24/12/10 and she has decided that she will relax for a year and not apply for other positions, so it would have been another run around with C$A to revert back to an adjusted income..

 From using the Centrelink and CSA calculators with the same care arrangements in place it was found that I will overpay her by about $2000 upon the end of financial year.. Gifting a payment is not an option as this doesn't support the child I have in my care. My question is for those in a similar situation where they are in sense a payee but because of the split in children and the income difference, are a payer:

-Has C$A willingly credited the overpayment and offset the following year?

-Now that a capacity to earn has been shown by the payee, does this hold the same weight as if a payer decided not to work for a year?

Also, I am looking at going to part time next year as my wife is due in June and she would like to pursue her career as a teacher full-time in the New Year. I would like to be the carer of our child during this time, so would like to know if others in this predicament have been treated fairly without "capacity to earn" stigma and requests for partners income..

 Up to now I have been naive as far as feeling my dealings with CSA were of educated responses, equality, and having one option only, theirs. I have found this forum very informative and empowering, and thank all for their contributions :thumbs:
When did you inform the CSA of the change to the level of care? I'm not sure if you will be classed as overpaying. It appears that you may think that because the other parent's salary was 52k that the CS  should be based upon this. CS is generally based upon the last relevant year of income i.e. the last tax return. The CSA should have acted immediately upon the notification of the level of care change and applied it from the date of notification so this wouldn't create overpayment.

You do stand a good chance of a capacity to earn (perhaps not from the CSA though). One example (Ryan) was where a parent who worked extra time during school holidays, just for a few days. This was then seen as a capacity to earn.

In your case (i.e. other parent claiming that you have a capacity to earn) caring responsibilities should suffice to exclude you from capacity to earn.

Here's what the CSA guide says in regards to capacity to earn:

The CSA Guide 2.6.14: Reason 8 - a parent's income, property, financial resources, or earning capacity (extract) said
Earning capacity

If the assessment is affected by a parent's reduced income, there may be special circumstances to justify changing the assessment to take into account the parent's earning capacity.
When can CSA take into account a parent's earning capacity?

From 1 July 2006, CSA can only determine that a parent's earning capacity is greater than is reflected in his or her income used in the child support formula if it is satisfied about all of the following three matters:

1. The parent is either:

    * not working despite ample opportunity to do so (section 117(7B)(a)(i)); or
    * has reduced his or her weekly hours of work to below full time work (section 117(7B)(a)(ii)); or
    * has changed his or her occupation, industry or working pattern (section 117(7B)(a)(iii));

AND

2. The parent's decision about his or her work arrangements is not justified by either:

    * his or her caring responsibilities (section 117(7B)(b)(i)); or
    * his or her state of health (section 117(7B)(b)(ii));

AND

3. The parent has failed to show that the decision about his or her work arrangements was not substantially motivated by the effect this would have on the child support assessment (section 117(7B)©.

CSA must be satisfied that all three compulsory criteria are satisfied before it can change an assessment to take into account a parent's earning capacity, rather than his or her actual income.

If the parent's circumstances satisfy only one or two of the criteria, CSA cannot make a decision based on the parent's earning capacity.

CSA must also be satisfied it would be possible for the parent to increase his or her income by changing his or her work arrangements. That is, work must be available for the parent in his or her area and the parent must have the necessary qualifications and experience to perform that work.
Not working; working reduced hours; or has changed industry, occupation, or working pattern

This is the first of the three compulsory criteria for an earning capacity decision.

When considering the first criterion CSA must be satisfied that the parent:

    * does not work despite ample opportunity to do so (section 117(7B)(a)(i)); or
    * has reduced their weekly hours of work below the usual full-time standard in the occupation or industry in which he or she is involved (section 117(7B)(a)(ii)); or
    * has changed his or her occupation, industry or working pattern (section 117(7B)(a)(iii)).

It is possible that a parent will meet more than one of these sub-criteria.

Except where the parent does not work, a parent who has not reduced his or her income cannot be found to have a higher earning capacity.

Example

A parent who refuses a promotion at work, maintaining his or her income at the same level, will generally not be found to have a higher capacity to earn.

Some reductions in income will not satisfy this criterion.

Example

A reduction from regular overtime to a standard working hours week or loss of bonuses which required additional effort beyond that required of a standard employee, cannot be considered as founding a parent's additional earning capacity.
Does not work despite ample opportunity

(section 117(7B)(a)(i))

A parent who is not working is one who is not engaged in work for remuneration, or in self-employment for profit.

A person can be said to be not working despite 'ample opportunity' to work if he or she has had offers of employment and refused them without adequate reason. Alternatively, if the person is not seeking work but there are job vacancies for which he or she is suitably qualified in their local area, this could also constitute ample opportunity to work.
Weekly hours of work reduced below the full-time standard for that occupation or industry

(section 117(7B)(a)(ii))

This sub-criterion may apply when a parent is still employed and has remained in the same occupation or industry. The relevant factor is that the parent now works less hours than they did previously. The fact that his or her hours have reduced is not in itself sufficient  the reduction must put those hours below the usual full time standard for the occupation.

The parent should be able to provide information about the usual full-time standard hours for their particular industry or occupation. Alternatively, CSA could obtain information from the person's employer.
Changed industry, occupation, or working pattern

(section 117(7B)(a)(ii))

This sub-criterion may apply when the parent is still employed, but has changed jobs, or rearranged his or her hours of work, or pattern of work. It is implicit that this change in industry, occupation or working arrangements has resulted in a lower income.

For a parent to change his or her occupation or industry requires a greater change than simply moving between employers or jobs. There needs be something in the nature of a change in career, or of working in the same type of job but in an entirely different field.

A parent who has changed his or her working pattern may still be in the same job, or employed in the same occupation or industry. What is relevant is whether the person has changed his or her hours of work, for example, by choosing not to work nights or weekends.

A parent may change his or her working arrangements, for example, to being a consultant or sub-contractor rather than an employee. In these situations CSA is satisfied that there has been a change in their working pattern.

If the CSA is satisfied that the parent meets the first criterion (i.e. because he or she meets one or more of the three sub-criteria discuss above) it may be appropriate to make a decision to base the assessment on that parent's earning capacity. However, CSA may only make a decision of that type if the parent's circumstances also meet the remaining two compulsory criteria discussed below.
Decision not justified by the parents caring responsibilities or state of health

This is the second of the three compulsory criteria for an earning capacity decision.

When considering this criterion CSA must be satisfied that the parents decision not to work, to reduce the number of hours, or to change his or her working pattern is not justified on the basis of:

    * the parent's caring responsibilities (section 117(7B)(b)(i));or
    * the parent's state of health (section 117(7B)(b)(ii)).

This is an objective test. The CSA must consider whether an ordinary, reasonable person would consider the parent's decision to be justified, rather than whether the parent who made the decision considers that their decision was justified. It is also important to note that if the parent's caring responsibilities or state of health do not adequately justify the parent's decision about his or her work arrangements, then CSA must then consider the third criterion below, relating to the parent's purpose in making that decision.
Parent's caring responsibilities

(section 117(7B)(b)(i))

The type of caring responsibilities that might justify a parent's decision to change his or her working hours will only be a personal responsibility to care for another person. Caring responsibilities include responsibilities to persons other than the parent's own children, such as their own parent, a new partner or step-children, elderly relatives or friends.

CSA will take into account the following factors when considering whether the parent's decision to change their working arrangements because of their caring responsibilities is justifiable.

    * the relationship between the person being cared for and the parent providing care;
    * whether the parent has a legal duty to maintain the person for whom he or she is providing care;
    * if the parent has does not have a legal duty, whether they have a moral duty and the extent of that moral duty;
    * the degree and type of care provided;
    * whether the parent has some capacity for part time or casual work in conjunction with his or her caring responsibilities;
    * the availability of alternate care (personal and institutional);
    * whether that alternate care is suitable and/or affordable; and
    * the previous and proposed duration of the period of care.

CSA will weigh up the evidence about these and any other relevant matters in order to decide whether it is satisfied that the parent's caring responsibilities are such that they justify his or her decision to change his or her working arrangements.

The parent who is primarily responsible for care of the children for whom child support is payable may not be employed, or may be working part-time in order to accommodate his or her child care responsibilities. Where this is a longstanding arrangement (e.g. one that existed prior to separation, or since the children were born) the parent primarily responsible for care of the children may not have an additional earning capacity, because his or her ability and opportunity to undertake paid employment is diminished by their child care responsibilities and their absence from the workforce.

A parent who has been in the workforce may cease work, or reduce his or her work commitments to accommodate their responsibilities to care for a child. The child for whom the parent provides direct care could be the child from a former relationship (for whom child support is payable), or a child of a new relationship. In such cases, the parent (whether he or she is the payer or payee in the case) may still have an unexercised earning capacity that makes the assessment unfair. CSA may consider the following relevant facts over and above those considered in other earning capacity cases:

    * the age, health and number of children being cared for;
    * the practical availability of child-care;
    * the economic cost of child-care compared with income available to be earned;
    * the proposed period of the parent's absence from the work force; and
    * whether the parent has appropriately balanced his or her obligation to support all of his or her children.

If the parent's caring responsibilities do justify his or her decision about his or her working arrangements, then CSA must not make a decision to base the child support assessment on the parent's earning capacity. However, if the parent's caring responsibilities would not preclude work, or additional work, CSA must proceed to consider the third criterion below, namely, the parent's purpose in making the decision about his or her working arrangements.
Parent's state of health

(section 117(7B)(b)(ii))

As with a parent's caring responsibilities, if a parent has health problems, this may mean that he or she does not have an earning capacity that makes the assessment 'unjust and inequitable'. If the Registrar is satisfied that the parent's state of health is such that he or she does not have an unexercised earning capacity that makes the assessment 'unjust and inequitable', it will not be necessary to consider whether the parent's circumstances satisfy the criteria in section 117(7B).

CSA will take into account any evidence that the parent presents about his or her state of physical and mental heath. It would usually be expected that a parent who claims to have made a decision to change his or her work arrangements because of his or her health will have been diagnosed by a qualified medical practitioner; treated for the condition and have made that decision based on medical advice. Therefore, the parent would usually be able to provide medical certificates or reports from his or her treating doctor, and/or reports from any specialist to whom the parent was referred.

The following factors are relevant in considering whether the parent's decision about his or her working arrangements is justified on the basis of the parent's state of health:

    * the fact that the parent is suffering from a medical condition and the effect that this has upon his or her capacity to work;
    * the expected duration of the condition;
    * any recommended treatment, and the impact that this has on the parents capacity to work;
    * the availability of light duties, if the parent could work in a restricted capacity.

CSA will weigh up the evidence about these and any other relevant matters in order to decide whether it is satisfied that the parent's state of health is such that it justifies his or her changed work arrangements. If the parent's state of health does justify his or her decision about his or her working arrangements, then CSA must not make a decision to base the child support assessment on the parent's earning capacity. However, if the parent's state of health would not preclude work, or additional work, CSA must proceed to consider the third criterion below, namely, the parent's purpose in making the decision about his or her working arrangements.
Purpose of the parent's decision about working arrangements

This is the third of the three compulsory criteria for an earning capacity decision.

When considering this criterion CSA must be satisfied that the parent has failed to demonstrate that affecting the assessment of child support was not a major purpose of his or her decision to not work, to reduce hours or change his or her occupation, industry or working pattern (section 117(7B)©.

The test is framed as a 'rebuttable presumption'. The starting point is that affecting the child support assessment is presumed to be a major purpose of the parent's decision about his or her working arrangements. The parent can rebut this presumption by demonstrating, to CSA's satisfaction, that affecting the child support assessment was not a major purpose of his or her decision.

This is a subjective test. The CSA must consider what the parent's purposes were in making the decision about his or her working arrangements and whether a major purpose was to affect the child support assessment. It is not necessary that CSA is satisfied that the parent's decision was objectively reasonable, but the reasonableness of the decision is a factor for CSA to consider in deciding whether it is satisfied that the parent has demonstrated that affecting the child support assessment was not a major purpose in his or her decision.

In considering the reasonableness of the decision, it needs to be kept in mind that this policy on earning capacity is intended to be flexible enough to allow parents to make decisions about their work and life, for example, choosing to pursue a different career. It is not the intention to micro-manage a parent's life on the basis he or she may have made a better decision about employment than he or she did in fact make.

The provision refers to 'a major purpose' not 'the major purpose'. This means that the parent can have more than one major purpose in making the decision. A major purpose does not have to be the dominant purpose. It is more than a 'significant purpose'. A suitable test would be whether affecting the child support assessment was one of the most important factors in the parent's mind at the time of making the decision about his or her working arrangements.

The usual way for a parent to rebut the presumption would be to show that there were other factors that he or she considered which were the major purpose and that affecting the child support assessment was not a major purpose. CSA will ask the parent to explain:

    * the factors they took into account in making their decision to reduce their earnings or not to work;
    * what financial arrangements exist to enable them to support themselves; and
    * the consideration they have given to the arrangements to support the children for whom child support is payable after they changed their work arrangements.

CSA will also take into account any other relevant information that is already available in CSA's records, including:

    * statements the parent may have made when advising CSA about their change in work arrangements;
    * statements he or she may have made when CSA was discussing collection activities; and
    * comments made by the other parent in the course of the change of assessment proceedings.

In particular cases, CSA may also contact the parent's employer or former employer to establish what reason the parent gave when he or she notified the employer of his or her decision.

If the parent cannot demonstrate that affecting the child support assessment was not one of the major purposes in the decision, he or she will fail to rebut the presumption and it may be appropriate for CSA to make a decision to base the assessment on that parent's earning capacity.

It is more likely that a parent will be found to have a higher capacity to earn where he or she has voluntarily made a change resulting in a reduction in his or her income. Where a parent has made a change involuntarily, such as being made redundant, he or she will be unlikely to be found to have a higher capacity to earn where he or she has made reasonable efforts to resume income earning activities. Documentation which should be available to CSA to substantiate claims relating to unemployment includes:

    * separation certificates and termination statements;
    * a 'job diary', as required by Centrelink for some 'Newstart' beneficiaries; or
    * copies of job applications and responses.

Study

A parent might decide to leave their employment (or reduce their hours of employment) in order to undertake a course of study. If the parent cannot demonstrate to CSA's satisfaction that affecting the assessment of child support was not a major purpose of his or decision to undertake study, it maybe appropriate to base the child support assessment on the parent's earning capacity, rather than the parent's reduced income.

CSA can consider the following relevant factors:

    * the parent's reasons for undertaking the course of study;
    * the length of the course of study;
    * whether the parent took into account his or her obligation to provide financial support for the children during the period of study;
    * the needs and situation of the children at the time of the application and during the period of study;
    * the manner in which the parent will support himself or herself during the period of study;
    * whether part-time work or part-time study was available;
    * the length of time the parent had been planning to undertake the course of study;
    * the likelihood of securing employment, and of deriving increased income, after the course of study; and
    * the qualification that would be awarded on completion of the course of study.

Even if CSA is satisfied that affecting the child support assessment was not a major facto in the parent's decision, failure to resume work following the anticipated course of study may leave the parent open to a further consideration of his or her earning capacity.
Change of occupation or industry

A parent's decision to change occupation or industry while maintaining full-time employment, resulting in a reduction in income, is not likely to lead to a finding of an increased earning capacity, especially if the parent's previous employment was dangerous or required significant travel and time away from home.
What is a parent's earning capacity

In respect of the earning capacity of the unemployed or under-employed parent, CSA may enquire as to the 'ability of' and 'opportunity for' that person to seek and gain employment (DJM and JLM (1998) FLC 92-816). CSA will consider the parent's qualifications, skills, age and employment history.

Examples

A parent who has been caring for children and has not been in the paid workforce for many years may have difficulty entering the workforce.

A parent who has been in the same job for 20 years, and is made redundant, may have similar difficulty.

On the other hand, a parent who is qualified in an occupation in high demand would be expected to enjoy considerable flexibility in their choice of employment.

The other relevant consideration is whether or not there are any special, local or other factors that affect a parent's capacity to secure employment. Opportunities for employment vary from place to place and between occupational groups.

In determining the extent of the parent's earning capacity, CSA may consider the following (Scott and Scott (1994) FLC 92-457):

    * the circumstances in which the parent became unemployed or without income;
    * the reasons for the unemployment or loss of income;
    * the nature of the parent's previous employment;
    * the efforts which they have subsequently made to obtain employment; and
    * the property or financial resources that are, or should reasonably be, available to the parent.

CSA must weigh up the individual factors of each case in deciding whether a parent who has ceased work, or reduced his or her hours, has the ability and opportunity to earn a greater amount, and whether that additional earning capacity makes the child support assessment unfair.
Cheers for the feedback..

CSA were informed of the level of care change immeadieately and a Change of Assessment was issued straight away, so the level of care isn't an issue in this query.


I was just under the impression that on occasion when I was first introduced to CSA, they would continually ask me to submit revised estimates on how much I was projected to earn during the financial year and send out a COA to match that estimate. I was also under the impression that they would also look back over the previous period and calculate who much I had over/underpaid, divide it by the remaining weeks in the financial year and add or deduct this from the revised rate. Once a tax return had been submitted, they would also go through the same process and deduct or add funds to a COA outcome that I had overpaid or owed and rinse and repeat…

Looking at her income, there would have been 13 fortnights of pay and 3.5weeks rec leave and loading paid. This would be most likely topped up with single parenting payment for the remainder of the financial year as she would only be entitled to $380pf in all payments if she declared her boyfriends wage… Living in Canberra paying 650pw in rent with a used cars salesman boyfriend and our 2 youngest children, and her shopping sprees, I would say defrauding the Commonwealth for $600pw is highly likely.

I based my estimate of overpayment this year on her tax income of 21k obtained from 09/10 assessment compared to an actual projected taxable income of about 40k. If they work off end of year tax statements only and dont factor in what should have been paid previous, then its no great deal and still a little win, it just means the budget isn't as tight after tax time whilst my wfe is on maternity leave ;)
If the other parent is in a de-facto relationship then that other partner's income must be declared. If you believe that it is not being declared then I would suggest that you contact Centrelink and make them aware. You can do this anonymously via Centrelink's website. Here's a link Centrelink - Report a Suspected Fraud


Ooops I forgot to post info regard overpayments so here's what the CSA guide says:

The CSA Guide - 5.5.5: Overpayments said
5.5.5: Overpayments
Version 2.2, Last updated 23 July 2010 5:00pm
Context

Overpayments of child support occur when a payee has been paid child support to which they are not entitled, usually because CSA has made a retrospective variation to a child support assessment, or where a court makes an order or declaration with retrospective effect. A payer may choose to waive their entitlement to be repaid an overpayment.

The payer is entitled to take action against the payee to recover overpaid child support. CSA is also entitled to recover some overpayments from the payee.
Legislative references

    * Sections 30, 72, 76 and 79 Child Support (Registration and Collection) Act 1988
    * Sections 107 and 143 Child Support (Assessment) Act 1989
    * Sections 44 and 47 Financial Management and Accountability Act 1997
    * Section 1228(2B) Social Security Act 1991

Explanation

    * Overpayments where there is no registered maintenance liability
    * Retrospective variation after a terminating event
    * Overpayments where there is a registered maintenance liability
    * Recovery from payees
    * Negotiated payment arrangements with payees
    * Withholdings from future payments of child support
    * Refunds to payers
    * Ongoing cases
    * Ended cases and ongoing cases where CSA decides not to refund

Where CSA makes a retrospective amendment to a child support assessment, or gives effect to a court order or declaration with retrospective effect, this can result in a child support overpayment.

Although the Assessment Act minimises the circumstances in which overpayments occur (for example, assessments are only amended prospectively when a parent estimates their income) overpayments do occur in the ordinary course of child support cases. It is important for CSA to deal with overpayments in a way that is consistent with the objects of both child support Acts and fair to both parents. Before seeking to recover an overpayment from a payee, CSA will contact the paying parent and ask if they wish to waive their entitlement to the overpayment. CSA will not recover from the payee if the payer does not seek repayment from the payee.

The Financial Management and Accountability Act 1997 requires CSA to deal with Commonwealth revenue in an efficient, effective and ethical manner (section 44). It also requires CSA to pursue all relevant debts owed to the Commonwealth unless the debts are not legally recoverable or CSA considers that it would not be economical to pursue recovery of them (section 47).

There are two kinds of child support overpayments:

    * overpayments where there is no registered maintenance liability
      (which are not debts the payee owes to the Commonwealth); and
    * overpayments where there is a registered maintenance liability
      (which can be debts the payee owes to the Commonwealth).

Overpayments where there is no registered maintenance liability

There is no registered maintenance liability if a liability that was registered was never entitled to be registered.

When CSA receives applications to register liabilities or make child support assessments, provided all the requirements of the law are satisfied, CSA must register the liability or make the assessments. Sometimes other evidence or a subsequent court order requires that the registered liability be cancelled. In these circumstances, the liability was never entitled to be registered.

CSA cannot recover overpayments that occur when there is no registered maintenance liability because they are not debts due to the Commonwealth under section 79 of the Registration & Collection Act. A payer can take action to recover these overpayments from the payee in a court with family law jurisdiction. If child support was paid under a child support assessment, the payer can make an application to the court under section 143 of the Assessment Act to recover from the payee any child support paid. If the registrable maintenance liability arose under a court order or court-registered agreement, the person may be able to take recovery action against the payee in the court that made the order or registered the agreement.

Example:

A court makes a declaration under section 107 of the Assessment Act that M should not be assessed in respect of the costs of child C. The effect of the courts declaration is that CSA is taken never to have made a child support assessment in relation to C. The payee, F, is taken never to have been the payee of a registered maintenance liability. The child support that CSA collected from M and paid to F is not a debt due by F to the Commonwealth under section 79 of the Registration & Collection Act.

If the court makes a declaration that the payer should not be assessed in respect of the costs of a child because the payer is not a parent of that child, the court is obliged to consider making an order for recovery of that overpayment (sections 107(6) and 143 of the Assessment Act). If the court orders the former payee (i.e. the payer of the order) to repay a specified sum to the former payer (i.e. the payee of the order), that parentage overpayment order can be registered with CSA for collection. Upon registration, the specified sum repayable by the payer of the order becomes a child support debt due to the Commonwealth under section 30 of the Registration & Collection Act. CSA can collect the specified sum for disbursement to the payee (i.e. the former payer) (see Chapter 3.1.2 for more information about parentage overpayment orders). The administrative and other measures that CSA can use to collect the amounts owed under a registered parentage overpayment order are discussed in Chapters 5.1 through to 5.4 of The Guide.

A payer (or former payer) is also entitled to apply to a court for an order under section 143 of the Assessment Act in any other situation where he or she has overpaid child support to the payee under a child support assessment. However, CSA can only register the order for collection if it is a parentage overpayment order and it requires repayment of a specified sum.

If an overpayment occurs when there is no registered liability, CSA will advise a payer that section 143 of the Assessment Act specifically provides for them to make an application to a court for recovery of child support paid where a liability no longer exists. The payer must name the payee as the respondent to their application, as the child support paid to CSA is taken to have been paid to the payee for the purposes of section 143 (section 143(4)).The court cannot make an order requiring CSA to repay the overpaid amount to the payer (Child Support Registrar and Z and T (2002) FamCa 182; Mercer v the Child Support Agency [2004] FCA 465).

Even if a payee is still a payee of a registered maintenance liability for other children in an assessment, the overpayment that relates to the child/ren for which the section 107 declaration was made is not a debt to the Commonwealth that is recoverable from the payee under section 79 (Mercer v the Child Support Agency [2004] FCA 465).

Under section 143 of the Assessment Act, the court may make whatever orders, in relation to the payee, it considers are just and equitable in the circumstances to give effect to the rights of the parties and the child(ren) (section 143(3)). If the court is considering whether to make an order for the former payee to repay an overpayment arising from a declaration under section 107 of the Assessment Act, it must have regard to the matters listed in section 143(3B) of the Assessment Act. These include:

    * whether the former payer or payee knew (or should reasonably have known) that the former payer was not a parent of the child;
    * any conduct of the former payer and payee that led to CSA accepting the application;
    * any delay by the former payer in making the application to court for a declaration under section 107 of the Assessment Act;
    * whether child support is or will be payable for any other child of whom the former payer and payee are parents;
    * the former payers relationship with the child; and
    * the former payer and payees financial circumstances.

Retrospective variation after a terminating event

Where a registered maintenance liability exists and CSA is advised of a terminating event, CSA must vary the liability from the day the terminating event occurred. Although backdating a terminating event cancels part of the liability, it is not the same as cancelling a liability completely. Backdating a terminating event is a variation to a liability that is entitled to be registered. Any overpayment can be recovered by CSA from the payee under section 79 of the Registration & Collection Act.

Example:

F is required to pay child support to M for the child C from 12 December 2006. On 7 October 2007, M notifies CSA that C left home on 15 August 2007. CSA varies the child support assessment by removing C from the assessment from 15 August 2007. M has received payments under 76 of the Registration & Collection Act which are repayable by CSA to F. CSA can recover these amounts from M under section 79.
Overpayments where there is a registered maintenance liability

There is a registered maintenance liability if, at any time, a liability was entitled to be registered. Overpayments that occur in relation to registered liabilities are debts due to the Commonwealth and are recoverable from the payee by CSA under section 79 of the Registration and Collection Act. For there to be an overpayment under section 79:

    * there must be a registered maintenance liability;
    * CSA must have paid the payee an amount that it collected in satisfaction of the liability (section 76) or the payee is taken to have received an amount because CSA offset amounts between the payer and payee (section 71AA); and
    * the payee was not entitled to be paid the amount or the amount is subsequently repayable by CSA to the payer because of a subsequent variation to the liability.

Examples:

CSA makes a payment of child support to M after it intercepts Fs tax refund. The ATO later advises CSA that the tax refund was for another taxpayer with the same name as F. M has received a payment under section 76 but was not entitled to be paid that amount. M has been overpaid and the overpayment is Ms debt to the Commonwealth under section 79.

CSA receives a payment from F by cheque and makes a payment to M, the payee. Fs cheque is later dishonoured. M has received a payment under section 76 but was not entitled to be paid the amount because CSA did not receive the amount from F. M has been overpaid and the overpayment is Ms debt to the Commonwealth under section 79.

M has received payments of child support from CSA. Ms entitlement is subsequently reduced because CSA allows Fs objection about the level of care that F has. M has received an amount under section 76 which is now repayable by CSA to F. M has been overpaid and the overpayment is Ms debt to the Commonwealth under section 79.

Ms child support assessment has ended as all the children are over 18. CSA amends the assessment retrospectively by replacing a default income figure with Ms taxable income as advised by the ATO. This amendment reduces the amount of child support that M was entitled to receive. M has received a payment under section 76 which is now repayable by CSA to F. M has been overpaid and the overpayment is Ms debt to the Commonwealth under section 79.

CSA can amend an assessment in relation to the days in the child support period(s) before a terminating event even though the case has ended (see Chapter 2.9.5 Amending Assessments). Any overpayment of child support arising from such an amendment is the payees debt to the Commonwealth. Similarly, CSA can recover arrears from a payer where CSA amends an assessment in relation to the days in the child support period(s) before a terminating event and that amendment increases the amounts payable.

A payee does not owe a debt to the Commonwealth where CSA makes a payment using funds transferred from consolidated revenue for top up.
Recovery from payees

The administrative and other measures that CSA can use to collect a specified amount owed under a registered parentage overpayment order by a former payee (who is now the payer of the order) are discussed in chapters 5.1 through to 5.4 of The Guide. The remaining information in this chapter relates only to overpayments that are recoverable from the payee under section 79 of the Registration & Collection Act.

If a payees overpayment is a debt due to the Commonwealth under section 79 of the Registration & Collection Act, CSA will contact the payee to discuss payment in full or a negotiated payment arrangement.
Negotiated payment arrangements with payees

Any payment arrangement will take into account a payees capacity to pay. CSA will explain how the overpayment occurred and the options available for repayment. Although the overpayment should be paid in a lump sum where possible, CSA will seek a payment arrangement that:

    * reflects the payees capacity to pay;
    * will not disadvantage the child(ren) by minimising ongoing child support;
    * reflects the size of the debt and a reasonable repayment period; and
    * takes into account the circumstances surrounding the overpayment.

A payee can pay instalments directly to CSA.

If a payee does not agree to repay the amount owed, CSA has statutory powers to recover the debt by:

    * withholding an amount, determined by CSA, from future payments of child support (section 79(2));
    * arranging for Centrelink to withhold an amount from any Centrelink payments to a payee (section 1228(2B) Social Security Act 1991); or
    * withholding an amount from the payees income tax refund under section 72 of the Registration and Collection Act.

CSA will take all necessary action to recover an overpayment from a payee.

CSA can recover overpayments in a court with a civil debt recovery jurisdiction. However, CSA will not take legal action where an arrangement to pay has been made and the payee is complying with the arrangement. CSA will consider legal action if it has not been able to successfully recover an overpayment using its administrative powers.

Unlike a child support debt, a payees overpayment can be extinguished by bankruptcy. Where a person who is overpaid is discharged from bankruptcy the overpayment becomes irrecoverable at law (see Chapter 5.7.1 Non-Pursuit of debt).

CSA cannot use a section 72A notice to recover an overpayment from a third party (see Chapter 5.2.9 Collection from third parties).

CSA may decide not to pursue a debt if it is uneconomical to pursue or is irrecoverable at law (see Chapter 5.7.1 Non-Pursuit of debt).
Withholdings from future payments of child support

CSA can recover a payees overpayment by withholding an amount from future payments of child support. However, CSA can only make further payments to the payee if the payer continues to make payments to CSA. In most cases, this means that the payee must have made a payment arrangement and the CSA must have refunded the overpaid amount to the payer. If no refund is made to the payer, the payee will not receive any further payments until the overpayment is fully absorbed by the ongoing entitlement.
Refunds to payers

CSA does not have authority to refund amounts overpaid to payers where the overpayment is not recoverable from the payee under section 79.

Even if the overpayment is recoverable from the payee under section 79, CSA is not obliged to refund amounts overpaid until the amount is recovered from a payee. CSA will not refund overpaid amounts to child support payers until they are recovered from the payee unless:

    * it will further the objects of the Act; and
    * the interests of the Commonwealth are protected; and
    * the interests of the payee are taken into account.

Furthering the objects of the Act

One of the objects of the Act (see Chapter 1.3 Objects of the scheme) is to ensure that periodic payments of child support are paid on a regular and timely basis. The Child Support Registrar must take this into account in exercising any discretion to refund amounts to payers.

Overpayments that are repayable by a payee under section 79 interrupt the regular and timely payment of child support unless the payee repays the overpaid amount immediately or enters into a suitable payment arrangement, allowing a refund to the payer. If no repayment or payment arrangement is made, the overpayment will be credited against ongoing maintenance until the credit is exhausted, meaning the payee will receive no payments until there is no overpayment left.
The interests of the Commonwealth

If the amount of overpayment is refunded to a payer (before recovery from the payee) the Commonwealth bears the cost until it recovers the amount from the payee. Whilst CSA has statutory powers to recover these debts, the debt may take years to recover or attempts to recover may be unsuccessful. CSA will generally not refund overpayments if it is unlikely to be able to recover the amount from the payee.
The interests of the payee

When an overpayment occurs, a payee may be able to seek to have the liability increased to reduce the overpayment.

A payee may be able to:

    * object to the decision that gave rise to the overpayment;
    * apply for a change of assessment; or
    * make an application for SSAT review or to a court for an increase in child support payable.

CSA will advise a payee of their rights to obtain a review of decisions that gave rise to an overpayment and the options open to them.

In some cases, refunding an amount to a payer may affect the success of a payees action to have the child support payable changed retrospectively. Decision-makers, such as Senior Case Officers and Judges, may take into account any hardship to a payer in repaying an amount once a refund has been made and may decide not to make a retrospective change (Halge v Carroll (1998) FLC 98-002). Even if a payee is successful in gaining an increase it may be difficult to recover lump sums already refunded to a payer, particularly if the payer has expended the amount on day-to-day living or on assets that cannot be liquidated easily. This may cause hardship for both parents.
Ongoing cases

In ongoing cases, CSA will consider whether it is appropriate to refund amounts in order to continue regular and timely payments of child support. If the overpaid amount is refunded to the payer, any further amounts received from the payer for the ongoing liability can be paid out to the payee under section 76.

To balance the interests of the Commonwealth and to promote regular and timely payment of child support, CSA will refund amounts overpaid if all of the following conditions are met:

    * the case is ongoing and likely to continue;
    * the payer has a history of making full and regular payments and there are no new circumstances that indicate that this will change;
    * CSA and the payee have negotiated an amount to be deducted from continuing payments of child support that will result in the overpayment being fully repaid before the case ends; and
    * the payee is not seeking to have the liability increased retrospectively.

Before making a decision, CSA will examine the payers payment history and ask the parents if there are any changes in circumstances that may affect that record or lead to an early end to the case. CSA will also ask the payee if he or she is intending to take any action that could lead to a retrospective change to the child support payable.
Ended cases and ongoing cases where CSA decides not to refund

If a payees ongoing entitlement to child support has ended, CSA will seek to recover the debt from the payee and will refund any recovered amounts to the payer as and when they are received.

CSA will also seek to recover overpaid amounts from the payee in ongoing cases where it has decided not to refund overpaid amounts to the payer. CSA will refund any recovered amounts to the payer as and when they are received.

Where there is an ongoing entitlement but a suitable payment arrangement cannot be made with the payee, CSA will generally decide not to refund the overpayment but will offset the overpaid amount against the ongoing liabilities. The payer will not have to make further payments until the overpayment credit is exhausted.
MikeT said
If the other parent is in a de-facto relationship then that other partner's income must be declared. If you believe that it is not being declared then I would suggest that you contact Centrelink and make them aware. You can do this anonymously via Centrelink's website. Here's a link Centrelink - Report a Suspected Fraud
 

Thank you for the extra info MikeT. Centrelink had been contacted via an anonymous tip off with Facebook comments screenshot and linked via a photo upload site that required no join up. It wasn't my favourite action to do such as I have seen offenders being sent to prison regardless of whether debt was paid back and if they had children in their care. I am not condoning anyones theft from a welfare system though, regardless of whether it could also cost me thousands due to her reduced "earnings" come next assessment…
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