Debt offset 277-04110000

Case 1- ‘K’ is owed $20,000 by ‘J’.

Case 2 – ‘J’ applies against ‘K’ due to change of care.

Case 2 has an ongoing liability of $500 per month and no maintenance arrears. The customers agree to off sett all of Case 2 liability against the debt remaining on Case 1. An ongoing offset for 100% of the Case 2 liability should be entered. Each time the liability is raised on Case 2, the maintenance debt on Case 1 will be reduced by $500. The result of this offset arrangement is that ‘K’ (the payer in Case 2) does not have to pay any maintenance to ‘J’ until the debt is paid off.

Case 1 – ‘E’ is owed $5000 by ‘F’.

Case 2 – ‘F’ is owed $1500 by ‘E’.

Both cases are ended due to the child turning 18. A one-off offset is applied for the amount of $1500. The offset reduces the arrears on both cases by $1500. The Case 2 debt is cleared in full, and the Case 1 debt is reduced to $3500.

Indika and Arjan have a child support case for child Sanj.

A recent role change occurred due to a care change. Arjan is now assessed to pay Indika $450 per month.

Indika owes Arjan a debt of $1100 from when they were the payer.

With an ongoing debt offset, Indika’s arrears will reduce by $450 per month, meaning their debt will be cleared within 3 months.

The debt offset alone is considered an acceptable arrangement.

Larry is now the payee and owes Jessica, who is now the payer, $3000.

The current child support entitlement is $272 per month. It will take 12 months for this debt to be offset in full.

Larry has an Adjusted taxable income of $70,000 and now has full care of Chloe, with a cost of child of $9943.

Based on the Debt repayment - capacity calculator the acceptable range for an ongoing payment arrangement would be between $383 and $479 per month.

Larry will need to pay within this range on top of the ongoing debt offset.

If Larry agreed to a payment arrangement of $400 per month, the debt owed can be repaid in 5 months.

Each month the debt reduces by $672, by offsetting the ongoing liability of $272, plus the $400 Larry is paying.

After 5 months, Larry can start to receive child support to support Chloe.

If Larry did not negotiate or refused to enter into an arrangement, child support would ask his employer to deduct the upper amount of the acceptable range each pay day until the debt is repaid in full.