Non-pursuit of individual Child Support debts 277-04240000

Prior to considering a NPOD submission, both customers must have been contacted within the last 2 months to:

• gather collection information, using the Collection and debt macro
• manage the expectations of the payee

If this has not occurred, contact the customers.

Gather information from NZIR if considering a non-pursuit for a NZ 'In' case, where:

• no payments have been received in the last 12 months
• no employment declaration signed in the last 12 months

See Grounds for non-pursuit.

Is this a potential non-collectable return?

• Yes, see Step 7, Table 1 in New Zealand Case Management - Withdrawals and returns to NZIR from Child Support
• No, go to Step 2

Ensure all appropriate attempts have been made to identify and action all collection opportunities:

• Administrative options: Ensure all appropriate options to resolve the debt have been discussed with the customer where contact was possible. For example COA, waiver
• Minimum Collection Activity: Complete Minimum Collection Activity, including conducting general searches
• Incomes: Ensure incomes used in the assessment accurately reflect the customer's actual income
• External information: Check the External Information window. Ensure all information has been appropriately investigated
• Referral: Consider whether a referral to a specialised area. For example, Litigation if appropriate
• Outstanding issues: Review and finalise any outstanding issues where possible. For example care or non-agency payments (NAP)
• Searches: Conduct specialised searches where appropriate, including information gathering through third parties. See External Searches Guide

Use the Customer Characteristic Matrix to determine which general and specialised searches are required based on the customer's circumstances.

Two categories for non-pursuit of debt are allowable under the Public Governance, Performance and Accountability Act 2013, see Rule 11 Recovery of debts, Public Governance, Performance and Accountability Rule 2014. All debts must be pursued unless they are:

• uneconomical to pursue, go to Step 2
• not legally recoverable, go to Step 3

In the following circumstances the debt is considered uneconomical to pursue:

Uneconomical

Recovering the debt would leave the Commonwealth financially worse off than if the recovery not been undertaken.

When the cost of debt recovery action, including searches, is more than the amount of the debt or the likelihood of success is low.

This may be relevant for ended cases with a low debt. The maintenance debt is unlikely to increase.

No capacity to pay

The payer has:

• no assets
• no evidence of a current or future income source and
• legal action to recover the debt would not be, or has not been, successful

All appropriate searches have been completed and no administrative or legal collection avenues currently exist. See the Customer Characteristic Matrix

These circumstances include but are not limited to, where a payer:

• is serving a period of imprisonment. They have no assets or source of income, or
• has been declared bankrupt. Searches show no present or future capacity to pay

Untraceable

Reasonable searches have been made to locate a payer and their location remains unknown for a continuous period of 6 months.

Debt is less than $100 and no ongoing liability

Where the case has ended and the debt is less than $100, discussions with the payee must occur to see if they still require the arrears collected.

Consider making a NPOD submission if the following criteria are met:

• the payee still wants the arrears collected
• no collection source has been identified
• level 2 searches are deemed uneconomical

Use the Customer Characteristic Matrix to determine the appropriate level of searches for the debt. Select the appropriate reason.

Seek technical support from a Service Support Officer (SSO), if:

• other circumstances are identified that are not included above and
• the debt may be uneconomical to pursue

Is the debt suitable for non-pursuit?

• Yes, see Table 3
• No, go to Step 5

The debt is considered not legally recoverable in the following circumstances:

All reasonable action taken

• collection action undertaken has proved unsuccessful
• any subsequent collection action is likely to be unsuccessful and
• the child is over 30 years old

Court likely to rule in favour of payer

Where court proceedings would likely reduce the debt. This would only occur in very limited circumstances, including where:

• a customer was unemployed and the debt accrued under a court order or agreement which did not have an unemployment clause
• there is a lack of sufficient evidence that the debt exists

Reconciliation

This is where:

• the parents reconciled prior to 1 July 2008
• no terminating event has occurred
• the case has not been ended
• the debt has accrued in this period

Seek technical support from a Service Support Officer (SSO), if:

• other circumstances are identified not included above and
• where the debt may be not legally recoverable

For international customers, go to Step 4.

Is the debt suitable for non-pursuit?

• Yes, see Table 3
• No, go to Step 5

If either customer resides overseas, a residency decision must be made prior to considering non-pursuit.

For international cases the debt can be considered not legally recoverable when:

1. A payer has moved indefinitely to live in a country:

• which is a non-reciprocating jurisdiction
• that does not recognise administrative assessments, that is, an excluded jurisdiction, and the debt arose from an administrative assessment
• that will not accept administrative assessments even though they are not excluded jurisdictions
• where there are no assets held, or income derived in Australia

2. A payer has moved indefinitely to a reciprocating jurisdiction, the debt is transmitted to that country for recognition and enforcement and:

• the Central Authority or jurisdiction has not responded. That is, attempts have been made to follow up and no payment has been received for 12 months since the date of transmittal
• it is known to Child Support that:
• Child Support assessments will not be accepted
• the country will not respond
• the country does not have the infrastructure to enforce the debt
• there are no assets held, or income derived in Australia

3. A payer has moved to a reciprocating jurisdiction, but the payee is unable or will not complete documentation necessary to support a transmittal and will not discharge

4. A payer has moved indefinitely to live in a country that is a reciprocating jurisdiction and:

• Child Support has asked the country to collect child support on its behalf
• the country has not recognised the existing Australian liability, but has raised a liability in their own jurisdiction
• that liability has been fully satisfied, but is insufficient to meet the amount due in Australia
• there are no assets held, or income derived in Australia

If:

• all appropriate collection options have been investigated
• the accuracy of the debt has been checked and where possible corrected
• the type of debt is suitable for non-pursuit, see Table 3

If these conditions are not met, go to Step 5

A non-pursuit decision for part of a debt cannot be made. If any collection action is possible, the debt is not appropriate for non-pursuit. Continue to take steps to reach a collection outcome. These may include:

• referral to a specialised area. For example Litigation, see Customer referral guidelines for Child Support staff
• tracing activity
• referral to international

If the case does not meet the requirement for non-pursuit because the customer is making payments which do not address the debt, and

• there are no administrative enforcement options available
• the customer does not meet the Intensive Collection Services Referral Guidelines
• the case is not suitable for litigation as there is no identifiable asset or the arrears are too low, contact the payee to advise them to contact Child Support if they obtain any new collection information.

Note: non-pursuit of debt does not apply to overpayments. If an overpayment is uneconomical to pursue or not legally recoverable, no further action is required. The debt will remain on the customer’s record.

Document all action taken and unlock as per the business line finalisation guidelines.

If it is determined a payer's debt should not be pursued, complete the Non- pursuit of individual and employer debt.

Record the submission in Cuba. Copy the macro submission onto the Non-pursuit Submission window. Add a notepad in the Debt Write Off window referring to the submission in the Collection window.

A Write Off Authorisation intray is auto-generated. Route the intray to the appropriate delegate for approval. See Accountable Authority Instructions

Non-pursuit delegation levels relate to the total debt amount, not just the maintenance debt.

For a non-pursuit submission that requires EL1 or EL2 approval, forward the submission using the Write Off Authorisation intray and send an email advice.

Note: Cuba does not support staff in approving their own submissions.

The delegate must decide if it is appropriate for the debt not to be pursued. When making this decision they will consider if:

• appropriate contact has been made with the payer to enter into a payment arrangement
• appropriate contact has been made with the payee to gather collection information
• appropriate searches have been conducted
• all action is appropriately documented in the Collection window and the Debt Write Off window includes a referral to the Collection window
• the submission accurately reflects all relevant information and collection action taken
• a correct reason for non-pursuit has been selected in the Debt Write Off window
• all outstanding actions relevant to the debt have been finalised where possible. For example, incomes correct, NAPs credited

If the delegation for the decision is higher than an EL1, an EL1 must forward the submission to the appropriate delegate via email. Delegated officers above the EL1 level are unlikely to have Cuba access.

The delegated officer will send back the response to the EL1 via email. A copy of these emails must be recorded on the Debt Write Off window notepad for audit purposes.

Note: the EL1 will process steps required in steps 4 and 5 for decisions higher than an EL1.

• Once the submission is approved, go to Step 5
• If the submission is not approved, go to Step 4

The delegate may reject the submission. For example they require additional collection action to be carried out. The delegate will update the Debt Write Off window and Collection window. See Non-pursuit of debt Cuba Process Help.

The delegate will:

• document in Cuba reasons why the submission has not been approved
• create a General Follow Up intray
• route the intray to the referring Service Officer

In the notepad of the intray the delegate must document:

• the reason why the submission has not been approved and
• what action/s is required by the Service Officer

Undertake this action before considering another non-pursuit submission.

If the case is suitable for non-pursuit, the delegate will:

• approve the submission and
• update the Debt Write Off window and Collection window

The delegate will:

• document in Cuba reasons why the submission was approved
• manually adjust the review date in the Recovery/Prosecution window - see Step 4 in Table 4 for guidance on an appropriate review date
• create a General Follow Up intray
• route the intray to the referring Service Officer

See Non-pursuit of debt Cuba Process Help.

Is the case a NZ 'In' potential non-collectable return?

• Yes, go to Step 6
• No, see Table 4

Cases sent to Child Support for enforcement by New Zealand Inland Revenue (NZIR) may be returned to NZ as Non Collectable where:

• a current case registered for at least 12 months
• no successful contact with the payer for at least 12 months
• no payments received for at least 12 months
• no employment declaration signed by the payer for at least 12 months
• a request forwarded to NZIR for new information to assist with collection and a response has been received within the last 3 months
• a non-pursuit of debt submission approved

These criteria are identified through general case management by an Intensive Collection Service Officer (ICSO).

Complete the Non Collectable Return macro and document in the Case window notepad.

See Step 5 in the Notification table of the New Zealand Case Management - Withdrawals and Returns to NZIR from Child Support.

When a non-pursuit of a payer's debt has been authorised, contact the payee to advise the following:

• Child Support has been unsuccessful in obtaining payment
• The child support debt is still owed
• Child Support will continue to review the case to see if there has been any change in the payer's circumstances. This may suggest the debt can be paid
• No further action will be taken unless there is new information from the payee or a change in the payer's circumstances to indicate a capacity to pay
• The payee’s objection rights

Note: do not under any circumstances, advise the payee that a decision has been made to not pursue a debt.

Payees unable to collect their full assessed amount of on-going child support may be receiving a reduced fortnightly rate of Family Tax Benefit. This occurs if they are being assessed under the Entitlement Method by Centrelink.

Advise the payee to contact Centrelink to discuss the differences between the Entitlement and Disbursement Methods.

Offer to transfer the customer to Centrelink.

• For International payees, go to Step 3
• For all other payees, go to Step 2

When the payee has been contacted or attempts made, issue a CE16-1 Letter to Payee - Non-pursuit of Debt letter from the Letter Details window.

Issuing the letter to the payee:

• is an additional requirement and
• must not replace or be omitted as a result of attempting to contact the payee by phone

Do not issue the CE16 - 1 Cuba letter if the payer is deceased.

The wording of this letter is inappropriate in this case.

It asks the payee to provide any new payer information.

If unable to contact the payee by phone, issue an appropriately worded unique letter.

If the payee is overseas, contact them to discuss the non-pursuit of debt unless:

• the case is a New Zealand 'In' case and the payer does not have any other collectable cases
• it is clear:
• the contact details for the payee overseas are for the Central Authority (CA) and
• Child Support has been working with the CA and not the payee directly. In this instance issue a CE16-1 Letter to Payee - Non-pursuit of Debt letter but no telephone contact is required

Note: where a case is being considered for return to NZ under the uncollectable provisions, complete all level 2 searches as part of the non-pursuit process.

Where a debt is not being pursued, Child Support must regularly review the customer's circumstances to identify if they have changed. In limited circumstances, regular review is not necessary.

These are cases where no special circumstances exist. These are reviewed regularly and a review should be undertaken:

• within 12 months of the non-pursuit being approved/last review date
• when Child Support receive information which suggests collection action may be possible

If the payer is incarcerated and their release date is:

• longer than 12 months, the review date should be to the end of the current Child Support Period. This provides the payer the opportunity to make a new election to reduce their assessment to nil
• less than 12 months, the review date should be the set to the expected date of release. The customer's capacity to pay is likely to change once they have been released and any new collection opportunities should be considered

If a review is necessary, the debt must be re-raised before investigation commences.

Where the payer's circumstances are unlikely to change it is not necessary to regularly review the case. These circumstances include:

• deceased customers
• all reasonable action has been taken and:
• the child is over 30 years of age
• the debt is under $100 and there is no ongoing liability

Note: in limited circumstances, some overseas and deceased payer cases may be identified as obsolete. Follow the processes in the Obsolete Child Support entries.