7.3 Compliance and enforcement
The department focuses on reducing child support debt through its compliance and enforcement programs. This includes setting up payment arrangements to repay the debt in the shortest possible time based on a parent’s capacity to pay. Table 41 below shows the percentage of active paying parents who do not have a child support debt. It also shows the percentage of active paying parents with a child support debt who have a payment arrangement in place to repay the debt.
An active paying parent is someone who is responsible for paying child support in at least one active child support case—that is, a case where there is a current or future liability.
Table 41 does not include parents whose cases have ended (meaning there is no current or future child support liability) but who still have a child support debt.
Table 41: Active paying parents without debt and with debt under a payment arrangement
|
2016–17 % |
2017–18 % |
2018–19 % |
|
|---|---|---|---|
|
Active paying parents without debt |
76.3 |
75.1 |
74.7 |
|
Active paying parents with a child support debt which is under a payment arrangement |
50.6 |
48.6 |
50.1 |
In 2018–19, the department continued to refine its child support compliance programs. Various activities are used to ensure that assessments for child support are accurate. For example, the department requests that the Australian Taxation Office (ATO) take lodgement enforcement action for mutual customers who have not submitted tax returns and have thereby prevented accurate assessment of their child support liability. Any available tax refund can also be used to reduce outstanding child support.
Wherever possible, child support is collected via employer withholding and income support payments to ensure timely and sustainable payments are made.
Where voluntary compliance is not possible, the department will pursue collection. This could include seeking a DPO or pursuing collection from a paying parent through the courts.
Table 42: Child support compliance and enforcement actions
|
Number of actions |
Child support collected/corrected $ million |
|||||
|---|---|---|---|---|---|---|
|
2016–17 |
2017–18 |
2018–19 |
2016–17 |
2017–18 |
2018–19 |
|
|
Lodgement enforcement finalisations(a) (b) |
126,548 |
158,099 |
60,323 |
N/A |
N/A |
N/A |
|
Tax refund intercept payment(c) |
99,022 |
108,549 |
106,147 |
116.0 |
127.4 |
123.7 |
|
Departure Prohibition Orders(d) |
1,952 |
1,572 |
1,921 |
9.9 |
12.5 |
28.0 |
|
Litigation(e) |
208 |
113 |
75 |
8.1 |
7.5 |
15.0 |
(a) To ensure assessments for child support are accurate, the ATO takes lodgement enforcement action for mutual customers. A finalisation is defined as a tax return lodgement; an ATO determination that a return is not necessary (RNN); a further return is not necessary (FRNN); or an ATO determined income. This definition has been updated to include all actions undertaken by the ATO, therefore this table will differ from previous published annual reports.
(b) In April 2019 an error was identified within lodgement enforcement reporting, which impacted previous quarters within 2018–19. As this issue was identified late in the financial year, corrective action was unable to be undertaken, resulting in a lower than expected end of year lodgement enforcement finalisation result.
(c) Tax refund intercepts resulting from actions taken to enforce ATO taxable incomes (lodgement enforcement) are included in this figure.
(d) DPOs preventing overseas travel are issued to people who have not made satisfactory arrangements to clear substantial debts. A DPO is a rigorous debt treatment that stops a child support debtor from leaving the country. Due to the success of the program, additional resources were directed to this activity to increase the collection rate of outstanding child support.
(e) When other enforcement options have been unsuccessful and an asset or income stream is identified, the department takes litigation action against parents who repeatedly avoid paying their child support.
Table 43: Employer withholding from wages and salaries
|
2016–17 |
2017–18 |
2018–19 |
|
|---|---|---|---|
|
Active paying parents with employer withholding payments set up(a) |
67,676 |
69,110 |
73,378 |
(a) The department may initiate employer withholding for both current liability and child support debt.
Table 44: Deductions from Centrelink and Department of Veterans’ Affairs payments
|
2016–17 |
2017–18 |
2018–19 |
|
|---|---|---|---|
|
Amounts collected from Centrelink and Department of Veterans’ Affairs payments(a)(b) |
$67.8 million |
$66.8 million |
$69.1 million |
(a) Represents the total amount of deductions from both Centrelink and DVA payments.
(b) These deductions may be made for both current liability and child support debt.
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https://www.transparency.gov.au/annual-reports/services-australia/reporting-year/2018-2019-45