Debt repayment 277-04120000

An intray generates when a payer misses their first payment

After registration:

• Initial Payment Defaulter with employer details (IPDEMEX1)
• Initial Payment Defaulter without employer details (IPDNOEMP)

After a period of compliance

• First Time Defaulter with employer details (FTDEMEX1)
• First Time Defaulter without employer details (FTDNOEMP)

After making a payment arrangement:

• 1st Payment Arrangement Default (FTPADFT)

Go to Step 2.

Customer contact is not required if:

• an Election for EW not to apply was accepted, and
• the customer failed to meet the required payments

If the EW not to apply was accepted:

• revoke the election. See Employer Withholding (EW) - Election for EW not to apply,
• set up Employer Withholding (EW) for the ongoing payments. See Service Officer role in setting up Employer Withholding (EW) linking, and
• use the Collection and Debt macro to calculate the payment arrangement amount, and
• request additional deductions by
• including the instalment amount at the upper amount of the acceptable range in the linking referral, or
• process in the payment arrangement window, go to Table 2 > Step 11.

The aim is to have the debt paid in the shortest possible time, consider making contact if the customer is likely to pay the amount outstanding immediately.

In all other circumstances, contact the payer. See Contact with Child Support customers

Does the customer need to be contacted?

• Yes, go to Table 2
• No, go to Table 3

Open the Collection and debt macro. Use the macro throughout debt repayment negotiations to:

• guide the conversation, and
• create a document to add to the Collection window

Consider all appropriate administrative options to ensure the debt is correct.

Possible corrective actions include but are not limited to:

• income correction
• changes to care arrangements
• accepting, reviewing and reconciling estimates
• non-agency payments
• change of assessment
• agreements, and
• opting out and/or discharging arrears

The information already available on the case provides valuable collection intelligence.

Review:

• recent customer interactions
• the possibility of using debt offset
• Level 1 and level 2 searches
• responses from s120 and s72A notices
• recent estimate information
• Employer Withholding (EW) arrangements, including if an election for EW not to apply has been accepted

When the customer cannot be contacted:

• follow the process in Table 1 in Contact with Child Support customers to maximise the possibility of contacting the customer
• if a collection avenue is known, commence enforcement action, go to Table 3.
• If a collection avenue is not known, issue relevant letters:
• for initial/first time defaults, issue the MX17-1 FTD Payer Letter asking the payer to contact us about their payments. See Create a letter using fill-in fields table.
• Where there are late payment penalties, issue the UQ11.02 – Pay now with LPP incentive offer.
• in other circumstances, issue request for contact/information (MX1-1) letter using the custom MX1-1 147.00 Collection/enforcement - request to call template.

When the customer can be contacted:

• explain total debt amount
• if payments are not collected from an employer, set up payroll deductions for regular payments. See Service Officer role in setting up Employer Withholding (EW) linking.
• request payment in full every time (do not assume the customer cannot or will not pay in full)

If the customer indicates they cannot pay in full:

• discuss the reason, and
• explore all possible avenues to help negotiate payment in full including:
• borrowing money from family or friends
• using available funds on their credit card
• drawing on home equity
• selling assets
• obtaining a loan from a financial institution, or
• use the LPP incentive offer for child support debts see Child Support late payment penalties and estimate penalties

Identify if the customer is experiencing vulnerability, see Identifying customer vulnerability and risk issues.

Customers may miss payments for various reasons. It is important to identify and try to resolve the reason for non-payment. This helps to increase the likelihood of compliance in the future.

Where the debt amount is currently registered is enforceable, it must be explained to the customers that debt recovery continues while they pursue action to remediate the debt.

COA or Objection lodged

Customers sometimes do not want to pay because they have a Change of Assessment or Objection in progress to vary the assessment. Advise them they must continue to make payments while their application or objection is being reviewed.

I'm not the parent

If the customer refuses to make payments or enter into a payment arrangement, explain Child Support is obliged to enforce payments if there is no stay order in place.

I don’t have contact with my children

Explain as they are the biological parent they have a legal obligation to support their child/ren. Offer mediation referrals through Family Relationship Advice Line if the customer is seeking contact with their child/ren. The formula accounts for costs incurred directly through care and the rate of child support remains payable and enforceable.

The children are over 18 years of age; the case has ended.

Explain the ongoing liability is no longer assessed as the case has ended. The remaining balance is for the past period when the case was active and the account is overdue as there were insufficient funds to cover the rate.

The other parent does not use child support on the children

Child support payments are to cover the everyday basic needs of the child/ren. This includes accommodation, food, utilities, clothing, medical, education etc. It is not the Agency or the payer’s requirement to track the spending of the payee to support the child/ren. If there are concerns of the child/ren’s welfare to contact Child Safety in their relevant state.

I have a new family to support

Check the parent’s children are recorded in the assessment. Explain that relevant dependent allowance accounts for supporting a child under the age of 18 in their care. The formula assessment does not account for current partner’s income and expenses. If there are special circumstances for supporting their current partner or other biological child/ren (i.e. medical costs), consider if Change of Assessment is required.

The children are working now why do I have to support them

If the parent believes the assessment is unfair due to a child’s income, consider if Change of Assessment is appropriate. If the parent intends to lodge the CoA the assessment is still payable and enforceable while there is a pending decision.

The payee has a new partner who can support them

The child support formula accounts for the parents who have the legal obligation to the child/ren. A new partner’s income or expenses for either parent is not considered and are not legally obligated to support another person’s child. Check if there are any special circumstances for a new partner i.e. the payee has ceased or significantly reduced their earnings due to be supported by their partner that has affected the assessed rate.

Paying child support will make me homeless

Ask the parent to explain their comment, gain insight into their financial situation (i.e. is the customer is arrears for their rent, are they in the process of moving, casually employed with reduced hours expected over Christmas/New Year etc). Exploring their comment will indicate how long the customer may feel in financial distress and assist with negotiating the arrears. Check the accuracy of the assessment and explain the ongoing liability is not negotiable.

I don’t want to pay

Identify if the parent does not want to pay or cannot afford to pay the requested amount. Gather collection intel, such as how the customer earns an income and how they support themselves for their everyday expenses. Explain the ongoing liability is not negotiable and advise the consequences of non-payment.

If the customer:

• agrees to pay in full, go to Step 9
• cannot pay in full, go to Step 6

Negotiate payment within 3 instalments, preferably with an initial lump sum payment plus up to 3 instalments.

Ask the customer what amount they can pay as an initial lump sum to reduce the debt. Requesting an initial payment will create a sense of urgency and reflect the customer’s commitment in addressing the debt.

Determine the frequency for payment within 3 instalments.

This can be weekly (3 weekly payments), fortnightly (3 fortnightly payments), or monthly (3 monthly payments).

The repayment amounts will be reduced if an initial lump sum is paid, and these can be of equal or unequal amounts to repay the debt in the shortest time.

If the customer:

• agrees to pay within 3 instalments, go to Step 9
• cannot pay within 3 instalments, go to Step 7

Explain to the customer because they cannot pay in a lump sum or within 3 instalments, a suitable repayment plan needs to be determined.

This will be based on their disposable income to repay the debt in the shortest possible time.

Calculate disposable income

Advise the customer:

• how disposable income is calculated
• allowances have been made for necessary expenses as part of the capacity formula. Resources has a link to the capacity formula
• what their disposable income is based on this calculation

Seek repayment proposal

Ask the customer to propose:

• the highest amount they can pay regularly to repay the debt in the shortest possible time, and
• the earliest date they will commence making these recurring payments, and
• if payments are not made by payroll deductions, the frequency of payments

Remind customers, where applicable, that these amounts are in addition to any ongoing liability due payable or debt offset arrangement.

Payments received by customers under the National Disability Insurance Scheme (NDIS) are not considered as a financial resource when determining a customer's capacity to repay their debt

If the customer’s proposed amount is:

• within or above the acceptable range:
• accept the proposed amount
• go to Step 9
• below the acceptable range:
• explain the amount proposed cannot be accepted
• tell the customer the amount they need to pay based on their circumstances. This is the upper amount of the acceptable range
• discuss the LPP incentive, where appropriate
• advise that enforcement action may be considered without further contact if they do not agree to an acceptable repayment amount, and
• negotiate a repayment amount that is within the acceptable range

Note: the lowest acceptable arrangement for a customer not in receipt of an income support payment is 3 times the minimum weekly rate which is similar to the amount an income support recipient would be expected to pay. The debt capacity calculator calculates this amount where applicable.

If the customer:

• agrees to an amount within the acceptable range, go to Step 9
• says they cannot afford to pay within the acceptable range, go to Step 8
• refuses to make an arrangement, go to Step 10

Where a customer indicates they cannot pay within the acceptable range, explain:

• necessary expenses are already taken into account to calculate the acceptable repayment amount
• an amount below this amount may be considered in limited situations:
• this only applies where they are considered to be in financial hardship
• they will need to provide detailed information about their assets, liabilities, income, and expenses to support this which may include evidence, and
• supervisor approval is required for arrangements below the acceptable amount

If the customer wants to make a financial hardship application, follow the process in Financial hardship.

When a recommendation is made to approve or reject the hardship application, manage expectations, go to Step 9.

If the customer has entered a payment arrangement:

• confirm the total amount payable, payment date and frequency including the payment arrangement plus any ongoing child support
• if the payments are collected from an employer, confirm with the customer the date the new arrangement applies from.

Play the consequence statement, go to Step 10.

• Play the Automated Message - Consequence Statement (CSP_DebtRepay) to the customer using Services Australia Workspace
• Select the Consequence Statement (CSP_DebtRepay) played to the customer check box in the Collection and debt macro once the customer confirms they understand the consequences of non-payment.

See Resources for the Automated Message.

If the customer:

• has entered into a payment arrangement, go to Step 11
• has not entered into a payment arrangement for their child support and overpayment debt, go to Step 12

Record the payment arrangement in the Payment Arrangement – Client Window:

Select ‘New’ and, in the Calculator group box:

To create a lump sum payment arrangement

• key the negotiated payment date in the Lump Sum Payment date field (this must be at least two days from today’s date).
• key the negotiated amount in the Lump Sum Amount field
• select Manual from the Lump Sum Method drop down (do not select ‘Employer Withholdings’, as the letters issued will not be correct)

To create an instalment payment arrangement

• key the first payment date in the First Instalment Date field. This must align with the payer's pay cycle and must be at least two days from today
• key the instalment amount in the Instalment amount field
• in the Payment Option group box:
• select the appropriate payment method from the Method dropdown menu.
• select the relevant payment frequency in the Frequency dropdown menu
• select the appropriate radio button in Customer Contacted group box. Selecting ‘yes’ will create a letter advising the customer they have agreed to the arrangement.

The customer must already have Employer Withholding (EW) in place before starting an EWA payment arrangement.

Special Conditions must be selected when entering any special conditions negotiated during the payment arrangement.

Note: if the payment method selected is 'EMP WITHHOLDING' and the 'First Instalment Date' does not align with the customer’s pay cycle, an Information dialogue box will warn that the payment date entered does not match payment option intervals. The Effective Date field will automatically populate. Re-key the First Instalment Date using the date populated in the Effective Date field (this date aligns with the payer's pay cycle)

Finalise the payment arrangement:

• Select Calculate. A dialogue box will present for Service Officers to check they have appropriate delegations to accept the arrangement
• Select either yes or no in the information dialogue box depending on delegation. If the Service Officer does not have the appropriate delegation, a Payment Arrangement Approval required intray will generate. Route the intray to the authorising delegate to action and await approval.
• Document payment arrangement by selecting the notepad and copy the collection and debt macro details.
• Save payment arrangement and check the generated letters for correctness.
• CE03-2 Payment Arrangement letters, and
• If payments are collected from an employer, PAD 6- Schedule of Deductions and cover letter
• If special conditions have been added, delete the payment arrangement letter. Go to the letter list window to create a unique letter containing the special condition information.

If offered, process the initial 25% LPP incentive offer, see Child Support late payment penalties and estimate penalties

Note: If a lump sum payment arrangement is keyed, TRIPS will be auto released. Please consider if a special recovery condition is needed.

Process ends here. Unlock the customer in line with the Finalisation guidelines for Child Support staff.

Start at Payment Arrangement – Client Window

End a payment arrangement:

• Select Delete from the File menu. The discard confirmation dialogue will open select:
• Yes, to end the payment arrangement, or
• No, to return the Payment Arrangement – Client Window. No change will be made to the payment arrangement

Extend a payment arrangement:

• Select Extend in the Calculator group box to recalculate the payment arrangement based on the current debt. An information dialogue box will open displaying the number of instalments the payment arrangement will be extended by.
• The information dialogue box will display:
• Yes, to extend the payment arrangement. This will change the number of instalments, last payment date and the remaining balance to be paid in the final payment.
• No, to return the Payment Arrangement – Client Window and not extend the current arrangement.
• Select notepad and document the decision to extend the payment arrangement
• Save to finalise the new instalments to the payment arrangement and review the letter issued to the customer and/or employer to check the accuracy.

If the payment arrangement has already been extended twice in the last six months Information dialogue box will open advising a new payment arrangement must be entered. Select OK to return to the Payment Arrangement - Client window then enter a new payment arrangement.

Automatic extended payment arrangements

A payment arrangement can be extended automatically (by daily batch runs) when an increase or decrease occurs to a customer’s outstanding child support account balance (debt/overpayment).

Letters are triggered in accordance with the type of payment method determined by the original payment arrangement, either Manual or Employer Withholdings.

Note: the batch will not:

• extend an arrangement as a result of a missed payment, or
• change the instalment amount or frequency agreed upon when the original arrangement was put in place

Commence enforcement action when the customer:

• refused to pay or negotiate a suitable repayment plan or
• has not spoken with child support and cannot be contacted or
• has failed to maintain the payment terms of a payment arrangement they entered into

Explore all possible avenues for enforcement action including:

• employer withholding (EW/EWA):
• include the instalment amount in the linking referral form when establishing employer withholding, or
• process the arrangement for additional deductions (EWA) in the Payment Arrangement - Client window, select Customer Contact as ‘No’. This will create the correct CE03-2 Payment Arrangement letter
• collection from third parties (s72A, s72AC or s72B)
• Centrelink (s72AA) or Family Tax Benefit (s72AB) deductions
• referrals for possible debt enforcement or departure prohibition orders

Note: do not issue a s72A notice for a National Disability Insurance Scheme (NDIS) customer.

Gather information from relevant sources, see Child Support's information gathering powers.

Identify the most appropriate and efficient avenue to recover the debt in the shortest possible timeframe.

Where an enforcing recovery by instalments, and the customer has:

• refused to pay, set the instalment amount at the upper amount of the acceptable range
• not spoken with child support, set the instalment amount within the acceptable range, at an amount that gives consideration to the time it will take to repay the debt. For example, if a lower instalment amount can recover the debt within 3 months, it may be appropriate to use this amount rather than the upper amount of the acceptable range to recover the debt

Use the enforcement tab in the collection and debt macro to document the decision.

Note: different delegations apply to different enforcement powers. Refer to the Operational Blueprint relevant to the enforcement decision made.

Unlock the customer in line with the Finalisation guidelines for Child Support staff.