In 2025–26, our tax lodgment activities under the child support lodgment enforcement program helped make sure the children of separated parents received appropriate financial support.
Meaningful outcomes
In the 2025–26 income year, the ATO worked with child support parents who had not lodged a tax return and secured more than 100,000 lodgments for close to 63,000 parents.
Tax refunds of $142 million were transferred to Services Australia and used to reduce unpaid child support debts owed by parents, which helped children receive appropriate financial support. Around $12 million of this was directly from actions undertaken by the child support lodgment enforcement program.
Reaching out early and often
The ATO sent more than 275,000 reminders to parents to lodge their outstanding income tax returns, helping them act early to avoid issues later and offer support where needed.
Example: Ahmed and Julie's story – Reminder to lodge
Ahmed and Julie have 3 children and are separated.
Ahmed has the children 90% of the time and is a receiving parent for child support. Ahmed usually lodges his tax return on time but was late in lodging his tax return this year due to changes in personal circumstances. Ahmed lodged after the ATO wrote to Ahmed to remind him to lodge.
Julie lodged on time, reporting an increase in her income for the financial year.
Both incomes were used by Services Australia to calculate their child support assessment.
End of exampleUsing firmer action where needed
The ATO took appropriate action where parents did not lodge their tax returns on time.
The ATO made 40,000 phone calls to discuss overdue lodgment obligations and provided parents the information they needed on how to lodge and pay.
When repeated attempts to contact parents didn’t lead to lodgment, the ATO took more than 42,000 firmer actions including issuing failure to lodge penalties, default assessments, and referring for prosecution for non-lodgment of tax returns.
Example: Priya and Gavin's story - Failure to lodge
Priya and Gavin have 2 children and are separated.
Priya doesn’t need to lodge a tax return for the 2025–26 income year as her income was below $31,047 and she received government benefits for the entire income year. She let the ATO know by submitting a non-lodgment advice and provided her income details directly to Services AustraliaExternal Link.
Gavin has not lodged his tax return despite ATO letters and phone calls. Information held by the ATO indicates Gavin earned income of approximately $100,000. Based on this information, the ATO issued a default assessment and applied a mandatory penalty for failing to lodge.
The ATO provided Gavin's income details to Services Australia. As a result, Gavin's child support assessment was re-calculated and his child support payments to Priya were increased.
End of example
Lodgment outcomes
|
Year |
Lodgment enforcement outcomes (includes income tax returns lodged, non-lodgment advice and default assessments) |
Number of child support parents with lodgment enforcement outcomes |
Tax refunds used to reduce child support debt (lodgment enforcement parents) |
Tax refunds used to reduce child support debt (all child support parents) |
|---|---|---|---|---|
|
2025–26 |
101,281 |
62,966 |
$12.2m |
$142.2m |