Debt repayment 277-04120000

The methodology ‘Collection is everyone’s responsibility’:

• applies to both payers and payees with debt
• provides an objective and fair approach to the repayment of debt
• aligns with the child support formula and the principal object of Child Support, that is, to ensure children receive financial support from their parents based on their capacity
• compares to industry standards for debt repayment. For example, lending institutions and other child support agencies internationally
• provides a simple and consistent framework for staff and customers
• includes a standardised assessment of capacity for repaying debt, and
• takes individual circumstances into account

The Customer Management Approach (CMA) for Child Support explains which areas complete more than Minimum Collection Activity and when it is appropriate to refer to another area for collection action. The debt repayment methodology must be used in all situations.

The aim of the debt repayment hierarchy is to achieve repayment of debt in the shortest possible time. To achieve this, the debt repayment methodology uses a hierarchy, which helps to maximise collection outcomes from parents with debt:

• Payment in full - Immediate recovery of debt through a one-off lump sum payment
• Three instalments - Recovery of debt within 3 instalments, or a lump sum plus up to 3 instalments
• Ongoing payment arrangement - Ongoing repayment amount, based on a standardised capacity formula
• Hardship - Ongoing repayment amount, based on an individual assessment of financial hardship