Child support debt recovery from Family Tax Benefit (FTB) 277-51040040

Since 1 July 2002, Child Support is able to recover child support debts from the FTB entitlement of the parent who has an outstanding child support debt with Child Support. Child support deductions cannot commence, vary or cease except under instruction from Child Support.

Customers affected by this measure include customers who have failed to pay a child support debt for a child by the due date and who are entitled to be paid FTB for that child. The child support debt must relate to the child for whom the parent receives FTB. These children are referred to as designated child support children.

Recovery of Child Support debts from FTB payments is at the discretion of Child Support. This lis not possible to come to such an arrangement with the payer. It cannot be used to collect ongoing child support liabilities - it is only for debt recovery. Centrelink cannot start, stop or vary child support deductions. This is only done by the appropriate updates made on Cuba by Child Support.

Child Support emails a Section 120 notice to the Child Support Unit (CSU). The Section 120 notice requests information about the amount of the customers FTB payment that may be deducted for a 'designated child support child' for whom the customer owes child support.

The Child Support Unit (CSU) calculate the maximum permissible amount that may be deducted and provides a response back to Child Support.

A Section 72A notice requests child support deductions to occur from a customer's Income Support payments. A Section 72B/AB notice requests child support deductions to occur from a customer's FTB payments.

Customers will be sent an automatic letter by Centrelink when Child Support starts, varies or ceases debt recovery from their FTB entitlement. For starts and variations, the letter will include the amount of the child support deductions. The letters will also include a line advising 'your child support deductions from your Family Tax Benefit have started/change/stopped'.

Recovery from FTB means a reduction in the customer's FTB payments to repay the debt. This may be partly offset by a corresponding increase in deductible child maintenance expenditure which the customer advises as part of their income estimate for FTB.

Child Support debts are classified as a debt to the Commonwealth. If a Child Support debt is being recovered from FTB instalment payments, the customer is not eligible to receive an FTB advance.

Child Support debts are not recovered from other family assistance payments.

The amount of FTB that can be recovered to repay a Child Support debt is calculated by the Child Support Unit (CSU) according to 1 of 3 formula according to the customer's circumstances.

Recovery from FTB instalments needs to be reviewed whenever the customer's FTB rate changes. This is to ensure that only the FTB payable for the designated child support children is used to recover the debt, not FTB for other children. For example, if a customer's rate is reduced because of an increase in their income estimate, Child Support deduction may also need to be reduced. When this review is required, an A0241FY manual follow up (MFU) activity will display on the Activity List (AL) screen.

When FTB payment ceases, the recovery instruction remains current for the standard grace period of 2 weeks, should FTB recommence.