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Debt repayment 277-04120000

This document outlines the debt repayment methodology and provides clear expectations for negotiating repayment of debt. All customer service staff in all business areas must use it.

Negotiate debt repayment

Step	Action
1	Prepare for the debt conversation + Read more ... 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 Some actions may occur before customer contact and others will prompt during the conversation with the customer.
2	Is the debt correct? + Read more ... 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
3	Review collection information + Read more ... The information already available on the case provides valuable collection intelligence. Review: Level 1 and level 2 searches responses from s120 and s72A notices Employer Withholding (EW) arrangements
4	Consider the customer’s individual circumstances + Read more ... Review: recent customer interactions any sensitive issue indicators on either the payer or payee the possibility of using debt offset
5	Contact the customer - request payment in full + Read more ... 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 further collection action is required for all enforceable maintenance liabilities. Go to Step 13 When the customer can be contacted: explain total debt amount 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 accessing superannuation Identify if the customer is experiencing vulnerability, see Identifying customer vulnerability and risk issues. Note: payments received by customers under the National Disability Insurance Scheme (NDIS) or the National Redress Scheme are not considered a financial resource when determining a customer's capacity to pay. If a customer provides NDIS or National Redress Scheme payments as an income source, or it is established the customer is receiving these payments, document for information only. Do not include in financial capacity calculations and do not request that a customer uses these payments to repay a child support or overpayment debt. The Resources page contains a link to the NDIS and National Redress Scheme websites. Encourage the customer to enter into an arrangement to address their debt in the shortest possible time. For child support debts only, not overpayments: Discuss the Late Payment Penalty (LPP) incentive offer (LPP do not apply to payee overpayment debts). See Child Support late payment penalties and estimate penalties
6	Explore reasons not to pay + Read more ... COA or Objection Customers sometimes do not want to pay because they have a Change of Assessment or Objection in progress. Advise them they must continue to make payments while their application or objection is being reviewed. Stay orders 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. NDIS 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 a customer provides NDIS payments as an income source or it is found they receive NDIS payments: document for information only do not include in any capacity calculations and do not request a customer uses NDIS payments to repay their debt The Resources page contains a link to the NDIS website. Promissory notes A promissory note is issued under the Bills of Exchange Act 1909 and is commonly used to guarantee payment of certain types of debt. Child Support will not accept a promissory note in satisfaction of a child support debt. If a customer presents Child Support with a promissory note, escalate to a Service Support Officer (SSO)/Program Support Manager (PSM). The PSM will escalate to Program Advice. If the customer: agrees to pay in full, go to Step 10 cannot pay in full, go to Step 7
7	Negotiate payment within 3 instalments + Read more ... 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. 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 10 cannot pay within 3 instalments, go to Step 8
8	Negotiate an ongoing payment arrangement + Read more ... 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. 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 a repayment amount or percentage for overpayment recovery from the ongoing liability if the payee is receiving child support from another payer. If the customer’s proposed amount is: within or above the acceptable range: accept the proposed amount go to Step 10 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. Late payment penalties do not apply to payee overpayment debts 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. If the customer: agrees to an amount within the acceptable range, go to Step 10 says they cannot afford to pay within the acceptable range, go to Step 9 refuses to make an arrangement, go to Step 11
9	Assess financial hardship + Read more ... 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 decision is made to approve or reject the hardship application, manage expectations, go to Step 10.
10	Manage expectations + Read more ... 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 tell the customer: to contact Child Support if they cannot pay the payments as agreed tax refunds may be intercepted unless Child Support is advised in a timely manner debts for child support only, not overpayments - late payment penalties may apply and may continue to accrue until the debt is paid in full If payments are collected from an employer, confirm with the customer the date the new arrangement applies from. In limited circumstances, the system generated schedule of deductions will need to be adjusted. The Employer schedule of deductions (PAD7-1) letter macro is used by International or Employer Services staff only. If adjustment is required, contact Employer Services: if urgent, call Employer Services using the 'CS_Employerwithholding' option in Services Australia Workspace if not urgent, create an Organisation Follow up intray on the employer. It will auto-route to the correct position for action Document the action in the Collection window.
11	Consequence Statement + Read more ... Play the Automated Message - Consequence Statement to the customer using Services Australia Workspace Select the Consequence Statement 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 12 has not entered into a payment arrangement for their child support and overpayment debt, go to Step 13
12	Process payment arrangement + Read more ... Record the payment arrangement. Consider: Special recovery conditions, for example: hardship bankruptcy TRIP stay order delegations for approving payment arrangements (section 5 Debts), based on the size of the debt payment arrangement letters: automatically generated by Cuba, or manually issued by International or Employer Services staff only using the Employer schedule of deductions (PAD7-1) letter macro Note: If a lump sum payment arrangement is keyed, TRIPS will be auto released. Please consider if a special recovery condition is needed. Overpayments - payment arrangements Child support overpayments and other payee debt Information for payers about child support overpayment Recovery from a payee’s child support entitlement For more information, see: Payment arrangements Cuba Process Help Tax Refund Intercept Process (TRIP) Cuba Process Help Child Support late payment penalties and estimate penalties Child support overpayments and other payee debt Information for payers about a payee overpayment Collection and debt macro Use the Collection and debt macro to create a document for the decision. Paste the completed document into the Payment Arrangement - Client window. If the customer’s arrangement is not being keyed in Cuba immediately, for example, pending a link request, paste the document in the Collection window. Unlock the customer in line with the locking rules for each business line see Finalisation guidelines for Child Support staff.
13	Take enforcement action + Read more ... Where the customer has refused to negotiate for debt repayment or outbound contact has been unsuccessful, commence enforcement action. 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 recovery at 100% of the payee’s ongoing monthly child support entitlement Note: do not issue a s72A notice for a National Disability Insurance Scheme (NDIS) customer. Determine the appropriate instalment amount Where an ongoing collection avenue is available for enforcement action, 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 Unlock the customer in line with the Finalisation guidelines for Child Support staff.