Centrelink deductions used to collect child support debts 277-04070000

Centrelink deductions can collect:

• ongoing liability under the Assessment Act
• child support or carer debts
• a child maintenance order or an overseas maintenance liability
• outstanding debt under a s143 recovery order that is registered for collection
• debts to consolidated revenue under s30 of the CSRC Act; however, system limitation prevents this. Consider alternative collection

Centrelink deductions cannot collect:

• penalties
• costs
• fines, or
• spousal maintenance arising under Australian law (specifically excluded by subsection 72AA(4))

A maximum of 3 times the minimum annual rate can be deducted. The amount deducted will be the liability amount for the instalment period, unless:

• this amount is higher than the maximum deduction, or
• where a debt has not been paid

See the Basic Values for the relevant year to determine the deduction amount.

Centrelink deductions can be made from certain ISP and Parental Leave Payments (PLP). See the Client Benefits window on how to check which benefit or pension (if any) the customer receives.

Income Support Payments (ISP)

Deductions can be made from the following payments:

• Youth allowance
• Austudy payments
• Jobseeker
• Special benefit
• Farm hold allowance
• Age pension
• Disability support pension
• Carer payment, and
• Parenting payment (single and partnered)

Parental Leave Payments (PLP)

From 1 July 2023, for child support deductions from PPL to occur:

• a claimant must be payable for some or all PPL days for a child born or adopted on or after 1 July 2023 and Services Australia is the paymaster
• the claimant has a child support liability/debt or overpayment, and
• the pattern of PPL days is 10 out of 14 days (which need not be consecutive or Monday - Friday)

Child support deductions cannot be applied to arrears payments of PPL.

PPL is paid at the National Minimum Wage for up to:

• 18 weeks (90 payable days) for a child born or adopted before 1 July 2023
• 20 weeks (100 payable days) for a child born or adopted on or after 1 July 2023

The rate of Parental Leave Pay is indexed each financial year. See Rate of Parental Leave Pay (PPL) and Dad and Partner Pay (DAP) for details.

The maximum Centrelink deduction is the PLP maximum gross amount minus the Protected Earnings Amount (PEA). See Basic Values for the relevant year's PEA.

Centrelink will not deduct the PLP instalment if it is less than the PEA. If customers receive a Centrelink ISP and start Centrelink PLP, deductions are available for both. Note: a PLP deduction amount is adjustable.

Centrelink may make other deductions, e.g., tax from PLP, which could affect the deduction amount.

If customers receive PLP from their employer, see Employer Withholdings (linking) for Child Support customers.

See Child Support Guide 7.4.4.40 Payment from parental leave payments.

Other payments

Centrelink deductions cannot be used to collect from ABSTUDY or FTB payments. Consider alternative collection methods, or see Recovering a child support debt from a Family Tax Benefit (FTB) for more information.

An ISP customer can apply for a concession to the amount deducted if they are having difficulties meeting other necessary expenses, and

• are assessed to pay less than 3 x minimum annual rate of child support, and
• the maximum deduction is being made to recover debt

Note: customers assessed to pay 3 x minimum annual rate or higher are not eligible to apply for a concession, as the maximum deduction will be used to meet the ongoing liability.

See Table 5

Centrelink deductions start automatically for most customers. A manual process can also be used to start deductions.

• Automatic Centrelink deductions and how to stop them, see Table 2
• Manually starting or stopping Centrelink deductions, see Table 3
• Actioning Centrelink Deduction intrays, see Table 4

Cuba and Centrelink exchange information to establish automatic deductions from customer Centrelink benefits.

Automatic Centrelink deductions start for customers who meet one of the following:

• case has an ongoing liability
• has a child support debt of at least $25
• has no debt offset in any case
• owes an overpayment of at least $25
• is in receipt of certain Centrelink benefits or Parental Leave Payment (PLP) (Cuba will seek to collect 100% of any PLP entitlement)
• does/does not have a Special Recovery Condition of hardship, stay order, or customer agreement, (a special recovery condition will only prevent disbursement, not collection) and the case has an ongoing liability or arrears registered for collection

Note:

• For Child Support arrears, automatic deductions start 7 days after the amount becomes due
• For overpayments, automatic deductions start 21 days after the overpayment is created

Automatic PLP deductions start at the maximum if the ongoing liability is:

• equal to or higher than the maximum deduction amount, or
• less than the maximum deduction amount, but the customer has arrears which makes their account balance more than the maximum deduction amount

PLP and Centrelink benefits can deduct at the same time.

It may be appropriate to prevent automatic deductions because of the customer’s circumstances, e.g., due to an agreement with the customer to pay manually or by another payment option.

Record a special recovery condition to prevent automatic deduction.

In the Special Recovery Condition window select:

• Reason: hardship, stay order, or client agreement
• Finalisation date: based on the reason for preventing automatic deductions
• If automatic deductions should never be established for the customer, key a finalisation date of 31/12/4000
• See Table 2 in Tax Refund Intercept Process (TRIP) Cuba Process Help

Centrelink Deductions will automatically stop when the:

• child support liability and/or arrears has been paid
• customer has stopped receiving a Centrelink pension, benefit or PLP

This generates a Centrelink Deduction Terminated intray.

To check the end reason, see Centrelink Deductions Window Help.

If unable to determine why the payment ended, check Cuba and Customer First documents.

To resolve problems with automatic Centrelink deductions, see Table 4.

Contact the customer, establish their circumstances and negotiate payment. See Contact with Child Support customer and Debt repayment.

Manual deductions are appropriate when a:

• liability raised, not yet due and the customer requests deductions start
• automatic deductions was prevented
• payee with an overpayment requests deductions
• payee with an overpayment does not have automatic deductions due to a debt offset in one of their cases. Note: manual deductions can still be set up in this scenario

Check customer contact has been made to:

• negotiate debt repayment. See Contact with Child Support customer and Debt Repayment, and
• discuss if the customer needs an income or estimate update. See Income Processing for Child Support customers or Child support estimates (Post 1 July 2010)

Advise the customer:

• deductions from income support payments or PLP will start
• deductions continue until the debt is paid, or when another payment option is more suitable, and
• only Child Support can start or stop deductions (Centrelink does not make this decision)

To start manual Centrelink deductions, see Table 1 in Centrelink Deductions Cuba Process Help.

It may be appropriate to end manual deductions, including when the customer:

• gains employment whilst still in receipt of a benefit or pension, to enable linking, or
• enters into a stainable payment arrangement that recovers the debt in a shorter period of time

See Centrelink Deductions Cuba Process Help.

The following intrays generate from the Centrelink deduction process:

• Centrelink Deduction Rejected intray, go to Step 2, or
• Centrelink Deduction Terminated intray, go to Step 4

See Intray Management Cuba Process Help to manage intrays in Cuba.

A Centrelink Deduction Rejected intray generates when Centrelink rejects the request because the customer:

• name or Date of Birth (DOB) details do not match, go to Step 3
• is not currently receiving Parental Leave Payment (PLP) or is not on a social security pension or benefit. Consider an alternative collection method. See Contact with Child Support customer and Debt Repayment.

A deduction request may be rejected if one or more of the following does not exactly match on Centrelink and Child Support records:

• customer name
• date of birth
• customer reference number

This may be the result of

• a keying error
• a slight variation in spelling, for example 'Stephen' rather than 'Steven', or
• the result of the customer changing their details with Centrelink or Child Support, but not the other

Sometimes, this is because 2 different customers incorrectly matched or multiple records.

Investigate all instances. Do not delete the intray until the issue is resolved.

To resolve mismatches:

To make sure current data remains available for corrective action, do not change or delete the CRN, DOB, TFN or legal name.

If a potential Identity mismatch is identified, this will need to be referred to the Solutions Gateway Team. See Customer Referral Guideline > Solutions Gateway Team.

Check:

• Cuba:
• documentation and correspondence of the customer’s original application to make sure their CRN was keyed in the Individual Customer Details window at the time of registration
• Individual Customer Details History dialogue box for previous name and address
• Other Details History dialogue box for CRN, DOB, TFN, OSID and phone details
• Customer First > Customer Summary for Name, CRN, DOB
• Customer First > Customer Summary > Benefit Status for:
• Receiving an ISP or PLP shows as (mnemonic)/CUR. See Resources table for all Pensions and Benefits
• Zero rate shows as (mnemonic)/CZR
• Parental leave pay shows PPL/CUR
• Customer first > Document Tools will show correspondence provided to Centrelink
• Customer First relevant screens:
• Allowance Benefit History (ABH) to see when they started receiving their ISP
• Pensions Status History (PNSH) to see when they started receiving a pension
• Payment Summary (PS) to confirm they have been receiving an ISP during the relevant period. In ‘Display payments for’ change to ‘all’. ‘Number of months in past’ defaults to 1. Key S and select ‘Enter’ to open it and identify the type, amount and timeframe of payment
• Customer First screen:
• Key ‘CCC’ to find the current CSA ID Number CIN
  Note the current and deleted CIN.
  When a Child Support record creates, so does a CIN. Matching CINs is critical for data exchange. Different CINs means the data exchange can’t match the intended record.
  Intertwined records (2 or more different customers) current and/or deleted CIN may not match the Pluto CIN
• Use Pluto to find a customer’s CIN under their ‘Identification’ icon
• ATO systems for their name/s, CRN, DOB, TFN and contact details

Contact the customer to confirm their details. see Contact with Child Support customer

Document the information found. If Child Support has incorrect information, escalate the findings to an aligned Service Support Officer and follow Correcting errors on Child Support cases. If Centrelink has incorrect information, request assistance with Centrelink/Child Support information exchange.

A Centrelink Deduction Terminated intray is generated when an active deduction has stopped because the:

• debt has been paid, or
• customer has stopped receiving PLP or a pension or benefit that can be deducted

If the customer still has arrears, contact the customer, establish their circumstances and negotiate payment. See Contact with Child Support customer and Debt repayment.

Delete the intray after resolving the issue.

Customers on an ISP can apply for a concession to the amount deducted if they are having difficulties meeting other necessary expenses, including:

• accommodation
• medical
• utilities
• self-education
• Centrelink debt or overpayment

Note: Parental Leave Pay (PLP) is not considered an ISP and does not require a concession if the customer wants to reduce the rate of deductions. Negotiate this like any other debt repayment arrangement.

A concession:

• can be applied when the customer has provided enough reasons to meet a total point value of 4 or more, see the Resources page. Documentary evidence is not needed
• only applies to deductions for overdue child support. The customer’s ongoing liability is not negotiable and must be deducted. When changing the amount to be deducted from a customer’s Centrelink payment, explain the following:
• the new deduction amount might not change in time for the customer's next Centrelink entitlement payment. As a result, a higher amount will be deducted from their next entitlement
• child support will complete a review of concession after 6 months to determine if it should remain in place

Document the decision in the Collection window, including the reasons why the concession is approved. See Documenting Child Support Information.

To process a concession for a customer in receipt of a Centrelink payment, see Centrelink Deductions Cuba Process Help.

After adding the deduction review, an Amended Deduction Review intray will generate with an effective date 180 days in the future. Do not delete this intray.

If a customer is eligible for a concession, the minimum deduction amount is set by the number of minimum annual rates payable. See the Resources page for more information.

No ongoing liability – the concession amount equal to 1 minimum annual rate plus at least $4 per fortnight deducted to address overdue child support.

One or two ongoing liabilities – the concession amount equal to 1 or 2 minimum annual rates plus at least $4 per fortnight deducted to address overdue child support.

Three or more ongoing liabilities – the concession amount equal to 3 or more minimum annual rates cannot have the concession amount applied. The entire deduction will be used to meet the ongoing liability.

To process a concession for a customer in receipt of a Department of Veterans' Affairs payment, see Issue section 72 notice Cuba Process Help.

Some customers applying for an ISP concession may be eligible to have their minimum assessment reduced to nil. Be alert for such cases and advise customers of their options.

For example, a customer on Disability Support Pension who uses more than 85% of their ISP to cover medical expenses might claim the ISP concession without realising their other options for reducing the minimum assessment. The References page has a link to the Child Support Guide 2.4.12 Minimum annual rate.

A review of the concession decision will be conducted after 6 months when a Service Officer:

• is allocated an Amended Deduction Review intray
• identifies the concession has been applied for more than 6 months

Evaluate whether the customer's circumstances have changed and whether the customer still meets the criteria for a concession. Contact the customer to confirm their circumstances.