Information for payers about child support overpayments 277-04260010

Before contacting the payer to discuss the overpayment, research the following:

• How did the overpayment happen? Is the overpayment recoverable? See Child support overpayments and other payee debt
• Review the case to confirm if debt recovery has been taken. Check these windows:
• payee's Payment Arrangement - Client, or
• Collection

See Contact with Child Support customers.

Use the Overpayment –talking to payers macro and record the conversation in the Payee Collection, level 1 Category action OVP – Payer contact

Contact the payer to discuss:

• how the overpayment occurred
• amount of the overpayment
• Child Support recognises the overpayment of child support as a debt
• managing the payer's expectations about overpayment recovery
• options available to the payer regarding the overpayment

Options available to the payer:

• seek recovery of the overpayment, see Step 5 in Table 2
• instruct Child Support not to recover the overpayment:
• Child Support can fully or partially remove an overpayment
• the payer will have a 7 day cooling off period to process a payer election not to recover an overpayment, see Step 1 in Table 2

• Play the Automated Message - Election to have the liability no longer enforced to the customer
• using Services Australia Workspace, select CSP_Discharge Arrears English
• Select the Election to have the liability no longer enforced message played to the customer check box in the Overpayments talking to payers macro once the customer confirms they understand their responsibilities

See Resources for the Automated Message.

Paste the document created by Overpayments – talking to payers macro with the payer’s instruction not to recover the overpayment in the following Cuba windows:

• Collection, and
• Manage Gift and Overpayment. See Documenting Child Support information

Does part of the overpayment still need to be collected?

• Yes, go to Step 5
• No, go to Step 2

Remove the overpayment immediately to prevent the overpayment being auto-recovered from the payee's next entitlement. See Overpayments Cuba Process Help.

• Complete the UQ14.00 - Overpayment removal cooling off - Payer letter template
• Paste it into a unique letter in Cuba (MX0-1 letter). See Letters for Child Support customers

The letter asks the payer to contact Child Support within 7 days of receipt if they elect to reverse their instruction not to recover the overpayment.

Allow the customer time to respond. See Standard response times.

When the cooling off period expires, if the payer:

• reverses their instruction not to recover the overpayment:
• reverse the overpayment removal. See Overpayments Cuba Process Help
• go to Step 5
• does not reverse their decision and the instruction not to recover the overpayment remains:
• delete the Payee Overpayment intray
• check Payee communication to determine if post contact is required to advise the overpayment has been removed
• finalise any outstanding issues, see Customer Management Approach (CMA) for Child Support

Payer decides to recover through Child Support

Where the case is ongoing and agency collect, explain the overpayment will reduce the ongoing liability by 100%. This means the payer does not need to make a payment until the overpayment has been fully recovered.

If the payer is making payments via Employer Withholding or Centrelink deduction, consider suspending the payment method until their overpaid credit reduces to $0.00 See Recovery from a Payee's child support entitlement.

If the case has ended explain that Child Support will:

• contact the payee to negotiate repayment of the overpayment
• gather collection information. If payments have been made privately to repay the overpayment, see Non-agency payments (NAP)
• repay amounts to the payer only after receiving them from the payee. If the payer has overdue child support, repaid amounts may be redirected to that debt. See Table 3
• update payer's bank details - record details in the Bank Details window. If the customer has an international address and does not have an Australian bank account, see International Disbursements – Refunds and issue of excess Cash
• finalise any outstanding issues, see Customer Management Approach (CMA) for Child Support

Note: if the payer asks about what action the agency is taking to recover the overpayment, be aware of the information that can legally be disclosed. See Disclosing information under child support law.

Payer decides to recover through private court action

The payer is able to enforce payment of the overpayment in a court with jurisdiction, in the same way as with child support debt.

• Manage the payer's expectations about court action, see Recovery of debts by customers in court
• Finalise any outstanding issues, see Customer Management Approach (CMA) for Child Support

If the recovery of the overpayment has not been discussed with the payee, see Child support overpayments and other payee debt.

If a payment is received from a customer who owes more than 1 debt and the amount received will not cover the total debts in full, the amount will be apportioned between the debts.

The debts owed could be a combination of child support (ongoing or arrears) or an overpayment. Resources has an example of Apportioning payments received.

Payer takes court action, court makes an order:

If a payment is paid by the payee because a court ordered it, for example, S143 order, the entire amount the payee owes the payer must be disbursed to the payer and not apportioned between debts. If apportionment occurs, seek SSO advice.

References has a link to the Child Support Guide 5.5.2: Entitlement to payment and disbursement cycle.

If a payment is received from a payee to repay an overpayment and the payer has other child support debts, the repaid amount can be redirected to pay those debts.

Refund to the payer any funds remaining in excess cash after redirection.

Resources has an example of redirection of repaid overpayment funds to other debts.

Does the payment meet the conditions for auto-redirect?

• Yes, go to Step 2
• No, they can be manually reallocated. Go to Step 6.

Excess cash from a repaid overpayment will only auto-direct to overdue child support, not to other debts a customer owes.

In order to have funds auto-redirected, the customer must have the following:

• an overdue child support debt, and
• no current Special Recovery Condition with Reason ‘Stay Order’. See Recovery Conditions window help

There are no objections rights to the decision to redirect, or not redirect, funds.

Amounts will continue to be auto-redirected until the child support debt is recovered in full.

Note: auto-redirect will only be processed as part of the auto-refund process. An auto-redirect will not occur when a payee receives child support and the payee owes an overpayment in another case. For recovery of payee overpayment debts, see Debt repayment.

A CE18-1 Section 71AB Redirection of Payment to Overdue Child Support Debt letter will be sent to the payer advising that funds have been redirected.

Note: the letter will generate only once for each payee from whom the customer had an overpayment refund redirected.

Resources has an example of customer notification.

A redirection may be suspended due to a stay order on the payer’s case that the money is being redirected to.

In limited circumstances, there may be other reasons to suspend a redirection however discuss this with a Services Support Officer (SSO).

To suspend a redirection, document the decision and record a Special Recovery Condition – Stay Order. See Applying a special recovery condition in Pluto and Cuba.

When a Special Recovery Condition – Stay Order is recorded, any payments received as repayment of the overpayment will auto-refund to the payer. See Table 4.

Any repaid overpayment amount remaining in the payer’s Excess Cash after redirection will be auto-refunded. See Table 4.

Resources has an example of managing funds remaining after redirection.

When funds are redirected to an overdue child support debt in a case with an unallocated PNAP balance, the PNAP will also be apportioned. This may trigger the NAP to be reviewed intray. See Non-agency payments.

Where overpayment funds remain in a payer’s Excess Cash account (due to an auto-refund being prevented), the funds will not auto-allocate or auto-redirect.

Seek help from an SSO. They will manually reallocate the overpayment funds using the Reallocate Cash window.

See Reallocate Cash.

Seek help from an SSO to consider creating a consolidated revenue debt for the payer when:

• funds are auto-redirected and it is later found:
• this should not have occurred, or
• the initial payment towards the overpayment should not have been credited to the payer’s account

See Reassign or transfer a missing or incorrectly receipted child support payment.

The amount received in repayment of the overpayment will auto-refund to the payer when the payer:

• has valid Australian bank details in their Bank Details window, and
• does not have a deceased client indicator
• has a disbursement option of ‘Cheque’ recorded and
• has a current postal address, and
• an amount to be refunded greater than $5.00
• amounts less than $5.00 will not be refunded by cheque and an AUTO REFUND FOLLOW UP intray will be created

A payer may have a disbursement option of Cheque recorded when they have:

• previously held a payee role, and
• no bank details are recorded in the Bank Details window

Auto-refund

• Only amounts recovered to repay an overpayment will auto-refund
• Process a manual refund for the full amount available if the payer has additional excess cash
• Update the payer’s bank details in the Bank Details window if an overpayment debt remains for recovery. This ensures future repaid amounts can be automatically refunded
• Funds can be manually refunded if an automatic refund does not occur. See Excess cash on a Child Support customer’s account

An Auto-Refund Follow-Up intray generates when a refund of overpayment funds cannot be processed automatically.

Create an Auto-Refund Follow-Up intray to place a hold on auto-refund excess cash manually. Cuba will not process the refund while this intray is present.

If the customer:

• is deceased, refer intray to Deceased Customers see Customer Referral Guidelines > Deceased customers
• has an international address and does not have an Australian bank account, see International Disbursements – Refunds and issue of excess cash.

Action the Auto-Refund Follow-Up intray as required in Step 1. For example, obtain the payer’s bank account details by contacting the customer. See Excess cash

If the customer has requested recovery of the overpayment, these funds should be refund to the customer. If unable to obtained bank details or the Auto-Refund intray cannot be actioned, seek advice from an SSO on how to proceed.

• Check the auto-refund amount does not exceed the total refundable amount. Check non-cash credits such as non-agency payment (NAP), discharge of arrears and debt offsets. See Debt Offset. If excess cash exceeds the total refundable amount, seek advice from an SSO

Deleting the Auto-Refund Follow-Up intray

• Do not delete the intray until bank details are obtained to allow the refund. The auto refund batch runs each night. The intray will recreate if the conditions for an auto-refund are not met. If bank details cannot be obtained seek help from an SSO
• Delete the intray when all errors have been fixed. This ensures the batch will attempt to process the refund.

Auto-refund payments can be viewed in the Refund Details window or the Payer Account Postings.

In the Refund Details window auto-refunds will be identifiable by an Authorising User ID of AUTO

In the Payer Account Summary Posting window:

• check for the posting codes 421991 or 424201 in the Payer Account Summary postings screen
• by checking the Payer Account Summary history to make sure there was an overpayment (the account would show a credit) before the refund occurred. The increase in the Payer Account Postings will match the Auto-Refund Excess Cash amount

A Refund Reversal intray will generate when the funds disbursed to the customer’s account are returned. Where a refund has been returned, the funds that are returned will be treated as ‘normal’ excess cash. A new refund needs to be manually created for these amounts once the new bank details have been confirmed.

An overpayment refund amount is returned:

• Confirm with the payer that their bank account details are correct in the Bank Details window. If the payer provides new bank details, record them
• Key a new refund. See:
• Excess Cash on a Child Support customer’s account or
• International Disbursements – Refunds and issue of excess cash