5.2.1: Arrangements for payment
Context
CSA can make arrangements with a person who owes a debt to CSA to pay the debt in full, or by instalments. CSA will consider the circumstances of the particular case when coming to an arrangement for payment by instalments.
Legislative references
Explanation
The Secretary of the Department of Human Services has issued Chief Executive Financial Management and Accountability Delegations (CED’s) under the Financial Management and Accountability Act 1997. The financial delegations provide the delegation to certain officers within the CSA to arrange for a debtor to pay a debt by instalments.
Arriving at a negotiated payment arrangement can be a useful first step in the enforcement process. It is often a more efficient way to assist a customer to meet their child support obligations than other methods of administrative enforcement.
The nature of an arrangement will differ depending on the circumstances of the case. In making a payment arrangement CSA will keep in mind:
- the amount outstanding,
- the time it will take to repay the debt,
- the need to have the debt paid in the shortest possible time,
- the debtor's ability to pay the debt in a lump sum,
- whether it would be more effective and quicker for the debtor to borrow and/or sell assets in order to pay the debt,
- the effect of the arrears on the child(ren) who would benefit from payment,
- the protected earnings amount (if a payer is employed), and
- the need to ensure that any amount deducted is not so high that a payer sees it as more attractive to leave that employment (if a payer is employed).
An arrangement may include the following features:
- an agreement to pay the debt off in regular instalments,
- an agreement on the date the debt will be satisfied in full,
- an acknowledgment that if the customer's circumstances change, either the debt will be repaid in full or another repayment arrangement will be entered into to repay the debt more quickly,
- an acknowledgment that if a tax refund becomes available during the period of the arrangement, it may be applied to the debt,
- an acknowledgment that any failure to comply with the arrangement without reasonable excuse will mean that the debt is repayable in full at that time.
CSA can periodically review a payment arrangement to ensure it still reflects the debtor’s current financial circumstances. Arrangements can also be reviewed at any time if new information about the debtor’s capacity to pay becomes available or if their circumstances change.
A periodic payment arrangement does not prevent CSA from using other collection methods if they become available. This could include taking enforcement action if CSA receives information about a customer's financial circumstances that indicates the arrangement is no longer appropriate.