Debt offset (CS) 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.

Parent A, who is now the payee owes $1000 to Parent B.

Parent A has 100% care of the child, and the current assessment entitles them to $143.92 per month.

As a low-income earner, the acceptable range for debt repayment for Parent A is $129 per month.

Therefore, the debt offset meets the acceptable range for debt repayment.

Service Officers can still discuss with parent A whether they are able to pay anything additional to repay their debt quicker, however the debt offset is considered an acceptable arrangement, and financial hardship would not need to be considered if they are not able to pay anything additional.

Parent A is now the payee and owes Parent B, who is now the payer, $3000.

The current child support entitlement is $272 per month.

Parent A has an Adjusted taxable income of $70,000 and now has full care of Child C, 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.

Based on this, it would be expected that Parent A enters a payment arrangement of between $111 and $207 per month to make up the difference and bring this into an acceptable arrangement.

If parent A advises they are unable to pay anything further towards the debt, Financial Hardship may need to be considered.