End of the child support anniversary loophole

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Services Australia will have the power to freeze the wages of more parents who fail to pay child support under a $7.8 million scheme targeting more than 18,000 people.

The move aims to close a loophole where it is “effectively closed once a child turns 18” when trying to collect a debt, Social Services Minister Anne Ruston said.

“The new approach will allow Services Australia to peg the parents’ payroll package to repay child support in more circumstances, including after a child turns 18,” Ms Ruston said on Saturday.

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The changes will also target parents who overpay child support because they earned more than they declared, but who delayed filing a tax return to avoid reimbursing the other parent.

The government says it will legislate to allow the recovery of child support in more circumstances, with the total amount of debt currently standing at $1.69 billion, including active and closed cases.

The new measures are estimated to recover approximately $164 million related to closed cases from 18,250 parents

And with international travel back on the cards for more people, Ms Ruston said the government would strengthen the no-departure order system which prevents parents who are not paying child support from leaving Australia.

‘Currently Services Australia must issue an exemption known as a leave certificate if the parent provides a down payment on their debt,’ she said.

“But, unfortunately, we know that some parents will make a down payment to be able to leave the country and have no intention of repaying the rest of their debt.

“This measure gives Services Australia the discretion to refuse an exemption if they have reason to believe the parent is likely to shirk their responsibilities and default on repaying the remainder of the debt upon their return to Australia.”

Since July 2017, 5,394 parents have been issued travel bans, recovering more than nearly $100 million.

“It’s money that helps put food on the table and clothes on the backs of thousands of Australian children,” Ms Ruston said.

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