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Wednesday, 22 June 1994
Page: 1939

(Question No. 1109)


Senator Knowles asked the Minister representing the Treasurer, upon notice, on 2 March 1994:

  With reference to the Child Support Agency (CSA):

  (1) Does the CSA hold monies received from non-supporting parents longer than 7 days; if so, are the monies kept in an interest bearing account.

  (2) How much money is deducted from payments received by the CSA.

  (3) Are payments made to custodial parents on a monthly basis only, or more frequently.

  (4) Are payments withheld if the correct amount is not received by CSA from the non-custodial parent.

  (5) Can mutual agreements be agreed where payments can be made direct from the non-custodial parent to the custodial parent.


Senator Cook —The Assistant Treasurer has provided the following answer to the honourable senator's question:

  (1) Some monies may be held for longer than 7 days. The money paid by the non-custodial parent is held in a trust account before it is paid to the custodian by the Department of Social Security (DSS). While this is a non-interest earning account, the money forms part of the Commonwealth Public Account. The daily credit balance of this attracts interest.

  (2) The general position is that no money is deducted from payments received by the CSA. However, the non-custodial parent can incur costs if he or she fails to pay maintenance on time. Those costs, payable by the non-custodial parent to the CSA, can include interest on judgment, late payment penalty and legal costs. Money intended as maintenance payments are not applied to those other debts.

  In some cases the custodian may have been overpaid in previous months, creating a debt to the Consolidated Revenue. In those cases monthly payments are reduced to gradually decrease that debt.

  (3) The CSA passes the money to the DSS in one of two ways. If the non-custodial parent or employer paid the money to the Agency on time, the CSA passes it to the DSS on the second Wednesday of the month. The DSS pays it to the custodian on the third Wednesday of the month. Otherwise, the CSA passes the money to the DSS on the last Wednesday of the month. The DSS then pays it to the custodian on the first Wednesday of the next month.

  (4) No payments are withheld if the correct amount is not received by the CSA. Any payments received are passed on to the custodian.

  Sometimes there may be a delay before a payment is passed by the CSA to the DSS. When the CSA receives a payment it necessarily carries out several checks. If the non-custodial parent paid by cheque, the bank must clear it. When an employer is deducting money from the salary or wages of a number of non-custodial parents, the CSA must reconcile the amounts paid by the employer to ensure the full amount due is paid. Sometimes employers remit only part of the child support they have deducted, or they remit late. The non-custodial parent may take unpaid leave, or receive pay in advance for leave, and so the CSA receives less or more money than expected. The need to establish what has been paid and who it is for can affect when payments are passed to the DSS for payment to the custodian.

  (5) The custodian can elect for the CSA not to collect a registrable maintenance liability, and this could then be paid directly by the non-custodial parent to the custodian.

  Further options depend on whether the custodian receives an income tested pension, allowance or benefit. If the custodian does not, the custodian can elect at any time for the liability not to be collected by the CSA. Also, if the liability being collected by the CSA is in the form of an administrative assessment the custodian can elect to end the liability. If the custodian does receive an income tested pension, allowance or benefit, the custodian must elect for the CSA not to collect their liability when first applying.

  Under changes that I announced on 6 April 1994, custodians who receive an income tested pension, allowance or benefit, and who are receiving regular child support payments, will be given the option of choosing to have the child support paid privately, even after the CSA has commenced collecting.