The payer can apply for Child support agency to suspend collection of the amounts payable

A court order or court-registered agreement for child maintenance does not stop being in force when the payer is unemployed. However, the payer can apply for CSA  to suspend collection of the amounts payable for the period that the payer is receiving a social security pension or benefit.

Legislative references 

Section 17(1), 37B and 113A Child Support (Registration and Collection) Act 1988

Regulation 5A Child Support (Registration and Collection) Regulations 1988

Explanation 

A payer may be unable to pay their child maintenance liability if they become unemployed. Many court orders do not address what should happen to the liability if the payer has a reduced income.

Since 29 May 1995 there has been an administrative option for the payer to apply for CSA to suspend collection of periodic amounts of child maintenance payable under a court order or court-registered agreement during a period in which they receive a social security pension or benefit (section 37B(2)).

From 19 July 2007 a payer can apply for CSA to suspend collection of periodic child maintenance payable under an overseas court order or court-registered agreement registered for collection in Australia.

What are the requirements for making an application? 

A payer of a registered maintenance liability that arises under a child maintenance order or court-registered agreement for child maintenance can make an application to suspend their liability. They can make an application if they have applied for, or already receive a social security pension or benefit (section 37B(2)).  

A payer of a registered maintenance liability who is in receipt of a social security pension or benefit may make an application after the period of liability under the court order has ended, if there are arrears owing.

A payer cannot make an application if their court order or court-registered agreement provides for the amounts payable to reduce, directly or indirectly, when they are unemployed or their income is substantially reduced (section 37B(3)).

When will CSA accept an application?  

CSA will accept a payer's application if they:

• meet the requirements for making an application and
• satisfy the prescribed income test for the next social security payment after they make their application.

CSA will ask Centrelink to confirm that the payer receives a social security pension or benefit, and whether they satisfy the prescribed income test.

If CSA accepts the payer's application it will start a low-income non-enforcement period.

What is the prescribed income test? 

The payer will satisfy the prescribed income test if the total amount of income they receive from social security pensions or benefits and other ordinary income is less than the maximum basic rate of pension payable (regulation 5A).

When does a low-income non-enforcement period begin? 

The low-income non-enforcement period is a period during which no periodic amounts of child maintenance will accrue as a debt due to CSA It begins on the day that the payer made their application, or an earlier date decided by CSA (section 37B(4)). The low-income non-enforcement period cannot begin:

• before the payer commences to receive a social security pension or benefit;
• before 29 May 1995, the commencement date of this provision; or
• after the day the payer lodged the application.