NOTE: This document was OCR'd from hardcopy printed from ATO website in 1998. The original html document does not appear to be served from any government website anymore. As of Feb 28 2000 no superseding Collection and Enforcement policy has been found on any government server. In the light of CSA's documented and provable behaviour, could this document be more than a tad embarrasing for CSA?
 

Child Support Agency

Collection and Enforcement Policy 1996

I I. Introduction
1.2. PRINCIPLES ON WHICH THIS POLICY IS BASED
1.3. WHEN A CASE IS REGISTERED FOR COLLECTION
1.4. WHEN A DEBT BECOMES OVERDUE
1.5. CAPACITY TO PAY
1.6. THE MAIN TYPES OF COLLECTION ACTION
1.7. COLLECTION ACTION AND THE PAYEE
1.8. WHERE THE DEBT IS UNCOLLECTABLE
 

General approach to collection

1.1. Introduction

1.1.1. This part sets out the Child Support Agency’s general approach to the collection and enforcement of child support debts.

1.1.2. Payment of child support is an important parental responsibility. Payers are expected to pay proper levels of child support on a regular and timely basis.

1.1.3. The Agency's primary role is the collection of money for the children of those parents who are unable to reach private arrangements.

1.1.4. The philosophy for payment of child support is voluntary payment, then progressively through the following:

negotiated payment,
administrative action
legal action or those who won't pay

1.2. PRINCIPLES ON WHICH THIS POLICY IS BASED

1.2.1. We will recognised that our clients may not be fully aware of their rights and obligations under the Child Support Scheme and, therefore, supply the information and assistance our clients need in order to meet their obligations.

1.2.2. We will encourage voluntary compliance by endeavouring to ensure that every contact with the payer is positive and productive. When we speak to the payer we will:

provide correct and consistent advice,
verify that the liability is correct,
clearly explain payment options,
negotiate payments arrangements that take into account the reasonable personal and financial
committments of the payer.

1.2.3. When a payer fails to pay their child support, we will contact the payer promptly to discuss payment in line with the above principles. We will explain our progressive options for collection, and give payers the full opportunity to meet their obligations voluntarily.

1.2.4. If a payer refuses to make an arrangement, or fails to comply with the terms of an arrangement, we will act promptly and take whatever administrative or legal action is necessary and appropriate to secure payment.

1.2.5. Collection action will he based on an identified capacity to pay. If the payer’s circumstances change significantly, we will take this into account in deciding whether to continue, to review or to defer action.

1.2.6. We will seek information from the payee which may assist in the collection or outstanding child support, and keep the payee informed of collection action taken.

1.3. WHEN A CASE IS REGISTERED FOR COLLECTION

1.3.1. A child support liability registered for collection with the Agency becomes a debt due to the Commonwealth under section 30 of the Registration and Collection Act 1988 (the Registration and Collection Act. Section 36 states that the payee is not entitled to, and may not enforce payment of, amounts registered for collection. Payments must be made to the Agency, and we are responsible for enforcing payment.

1.3.2. When a case is registered for collection we will contact the payer to ensure that he or she understands his or her rights and obligations. We will explain the payment options, the due date for payment and the actions that may he taken to collect outstanding payments. If the payer is employed, we will offer to have child support deductions commence immediately.

1.3.3. Our aim is to have the correct amount paid by the due date. Payment of the ongoing liability when it is due is a mandatory condition of any payment arrangement.

1.4. WHEN A DEBT BECOMES OVERDUE

1.4.1. If the payer fails to pay by the due date, we will contact him or her by telephone to discuss payment of the outstanding debt-  If the payer is unable to pay the debt in full, we will accept a reasonable payment arrangement. Negotiation will he attempted in preference to other action. Legal action will only be considered where negotiation has failed.

1.4.2. If the payer is employed we will arrange to have the ongoing liability deducted by the employer and, if appropriate, additional amounts towards arrears.

1.4.3. Payment arrangements, and the type ofcollection action taken where negotiation fails, will be based on the payers capacity to pay.

1.5. CAPACITY TO PAY

1.5.1. In determining the payer’s capacity to pay we will consider:

Income;
nature of employment,
other sources of income (eg. rent, dividends),
future sources of income,
non- taxable income (Army Reserve pay, some pensions),
assets;
monetary assets such as funds held in any accounts with financial institutions, and other investments, house or other real estate.
goods and chattels,
motor vehcles,
funds or asscts where legal ownership has been transferred to another person, particularly recent transfers of funds or property,
anticipated funds;
pending sale of property or assets,
property settlement,
refunds of tax overpayments,
lump sum compensation, compensation payments, insurance claims, other legal settlements, windfall gains due, such as gambling wins, lottery wins, cash competition prizes, etcetera,
expenditure required for self support and for any other person(s) the payer has a legal duty to
maintain,
other neccssary commitments,
the need to meet the ongoing liability.

1.5.2. The following circumstances may indicate that there is no capacity to pay:

necessary commitments exceed excess income,
no funds exist from which payment can occur,
there is no likelihood of funds becoming available,
security over property equals or exceeds the market value so that no surplus would be available on sale of the property,
no assets or assets have no realisable value,
no capacity to borrow money.

1.5.3. We may reassess capacity to pay where there is:

evidence that the payer did not disclose his or her full financial position or previous information was incomplete or incorrect,
an increase in income or a decrease in expenditure,
a change in the realisable value of an asset,
acquisition of further funds or assets,
any other information is given or obtained that indicates a capacity to pay.

1.6. THE MAIN TYPES OF COLLECTION ACTION

1.6.1. Where there is evidence of capacity to pay, and the payer refuses or fails to pay voluntarily, we may take the following types of action to collect the debt:

deductions from salary or wages,
collection from third parties,
interception of tax refunds,
legal action.

1.6.2. Where the payer holds or expects to receive funds we will generally regard this as evidence of capacity to pay. Provided the payer has been made aware of the outstanding debt, we may act immediately and without prior notice to avoid the risk of jeopardising collection action.

1.6.3. Appropriate actions will depend on the individual circumstances of the particular case, including the most cost effective and timely  manner of collection.

1.7. COLLECTION ACTION AND THE PAYEE

1.7.1. Officers remain at all times bound by the secrecy provisions in section 16 of the Registration and
Collection Act. section I50 of the Child Support (Assessment) Act 1989 (the Assessment Act), other
acts administered by the Commissioner ofTaxation and the Information Privacy Principles in the
Privacy Act I 988.

1.7.2. Subsection 113(2) of the Registration and Collection Act allows us to keep the payee informed of action taken to recover the registered liability. While this provision means that the payee can be informed of recovery action taken, we will not disclose:

personal details about the payer or any other person,
other protected information,
any information which may hinder the progress of the collection activity.

1.7.3. For example, we may advise the payee that a tax refund has been intercepted, that a section 72A notice has been issued or that employer withholding has been arranged. However we will not inform the payee of the details disclosed in the payer's tax return, the source of funds targeted by the section 72A notice, or the name of the payer’s employer.

1.7.4. We will contact the payee to seek information that may be of assistance in collecting arrears. We will investigate specific information in relation to income, assets or sources of cash funds. The payee may be informed that further action is not possible where information is not specific enough.

1.7.5. We may require or obtain details regarding the payer’s financial position, including details of income, expenditure, debts and assets. This information will not be made available to the payee.

1.7.6. The payee’s approval to a payment arrangement will not be sought, but if the payee provides specific information regarding a greater capacity to pay, it will be considered.

1.8. WHERE THE DEBT IS UNCOLLECTABLE

1.8.1 There will be cases where all action to recover the outstanding debt has been unsuccessful and/or there simply is no capacity to pay. A decision may he made that the outstanding debt is uncollectable and will not be pursued.

1.8.2. Where no further recovery action is to be taken, the payee will he informed accordingly. If the debt is at least six months old the decision may be an “appealable refusal decision’ as defined in subsection 4(l) of the Registration and Collection Act. Subsections 85(l) and 85(2) of the Registration and Collection Act entitle the payee to lodge a written objection against such a decision.

1.8.3. Recovery action will recommence if there is a significant improvement in the payer’s circumstances, or if we become aware of a previously unidentified capacity to pay. There will be cases which will never he reviewed, such as a deceased payer where the estate has been finalised and there are no funds available.