Explanatory Memorandum
(Circulated by authority of the Minister for Family and Community Services, Senator the Hon Jocelyn Newman)Chapter 4 - Private Collection Between Parties
Overview
4.1 Schedule 4 of the Bill will amend the Child Support (Registration and Collection) Act 1988 (the Registration and Collection Act) to:
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- allow parties to move to private collection by agreement at any time
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- require parties to move to private collection in certain circumstances where the Registrar is satisfied that regular payments would be likely to continue.
Summary of the amendments
4.2 The proposed amendments will require parties to take greater responsibility for their child support arrangements while also providing for a safeguard in the event that the private arrangements breakdown.
4.3 On a day to be fixed by Proclamation, not more than 12 months after the day on which the Act receives Royal Assent.
Background to the legislation
4.4 Currently, the payee of a registered maintenance liability has the option of advising the Registrar that they no longer require enforcement of the liability by the Registrar. A payee has the option to apply for the liability to again become enforceable by the Registrar and also request the collection of certain arrears.
4.5 The payee is the only party who can elect for collection to be changed to private collection. If the payee is not in receipt of a social security payment, this decision can be made at any time but not more than twice in a five year period. A payee who is in receipt of a social security payment can only elect to change to private collection where the payer has established a good payment record.
4.6 The Joint Committee considered that a large proportion of parents who voluntarily pay child support to the Registrar on time could be safely moved from collection by the Registrar. The Joint Committee's Recommendations 69 and 70 dealt with this matter.
Explanation of the amendments
4.7 The proposed amendments address Recommendations 69 and 70 of the Joint Committee.
Election by payee to undertake private collection
4.8 Under the proposed amendments any payee of an enforceable maintenance liability will be able to undertake private collection at any time. There will no longer be a requirement for the payer to have a satisfactory payment record before a payee receiving a social security payment can elect to undertake private collection. There will also no longer be a limit placed on the number of times that the payee can undertake private collection. [Item 4 - repeal section 38, insert new section 38 and subsections 38A(1) to (3); Items 5, 6 and 7 - amend new subsections 39A(2), (3) and (7)]
4.9 Where:
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- a court ordered liability has been registered with the Registrar for collection
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- there is no provision in the order for reducing the liability due to reduced income, and
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- a payer is in receipt of a social security pension or benefit
a payer may apply under the Registration and Collection Act for the liability to no longer be enforced by the Registrar. This is called a "low-income non-enforcement period". If the Registrar accepts such an application then enforcement is suspended. Where a low-income non-enforcement period is in place a payee will not be able to elect to undertake private collection. [Item 4 - insert new subsection 38A(4)].
Joint elections by parties to undertake private collection
4.10 The Registrar will allow parties to move to private collection by agreement at any time by making a joint election. [Item 4 - repeal section 38, insert new section 38 and subsections 38A(1) to (3); Items5, 6 and 7 - amend new subsections 39A(2), (3) and (7)]
4.11 The parties will not be able to elect to undertake private collection if a low-income non-enforcement period is in place. (Refer to paragraph 4.9space [Item 4 - insert new subsection 38A(4)]
Registrar requires parties to undertake private collection
4.12 The proposed amendments will provide the Registrar with the power to require payees and payers to undertake private collection once a satisfactory payment record of six months has been established and the Registrar is satisfied that the payer is likely to continue to make timely payments. The Registrar will not require private collection where the payer has an unsatisfactory payment record, there is a low-income non-enforcement period in place or where such private collection is considered inappropriate. The Child Support (Registration and Collection) Act will prescribe a satisfactory payment record for this purpose. [Item 4 - insert new subsection 38B(1); Items 5, 6 and 7 - amend new subsections 39A(2), (3) and (7)]
4.13 The Registrar must vary the particulars in the Register to reflect this decision to move parties to private collection. The Registrar will select a day from which the decision will take effect being a day not earlier than 28 days after the day on which the Registrar makes the decision. This minimum period has been set to give parties sufficient time within which to organise their affairs for private payment or dispute the decision of the Registrar. The liability will cease to be enforceable by the Registrar after this day. [Item 4 - insert subsection 38B(2)]
4.14 As the Registrar's decision to require parties to undertake private collection will require a variation to the Register, either party will be able to lodge an objection under section 83 of the Registration and Collection Act.
4.15 The Registrar will have the power to revoke the decision prior to the date the decision is to take effect. [Item 4 - insert subsections 38B(3)and(4)]
Application to Registrar for liability to again become enforceable
4.16 The payee may apply for the liability to again become enforceable by the Registrar, where the payer defaults or in other special circumstances. In the absence of such an application which may only be made by a payee, the liability will remain non-enforceable by the Registrar. A payee who has elected for private collection under section 38A or was required to undertake private collection by the Registrar under section 38B will be able to apply to the Registrar for the liability to again become enforceable in limited circumstances. [Item 4 - insert subsections 39(1) and (2)]
4.17 An application may not be made to the Registrar where a low-income non-enforcement period is in place in relation to the liability. (Refer to paragraph 4.9space [Item 2 - amend paragraph 33(1)(b); Item 3 - amend subsections 37B(6) and(7); Item 4 - insert subsections 39(3)]
4.18 The Registrar must grant or refuse the application to make the liability enforceable again within 28 days after receiving the application. The Registrar must grant the application if the payer is considered to have an unsatisfactory payment record or if the Registrar is satisfied that special circumstances exist making it appropriate to grant the application. If the Registrar refuses an application the payee will have the right to object under section 85 of the Registration and Collection Act. [Item 1 - amend paragraph (b) of the definition of "appealable refusal decision" in subsection 4(1); Item 4 - insert new subsections 39(4)and(5)]
4.19 Where the Registrar grants an application, he must make the necessary variations to the Register to enable the liability to again become enforceable. Where a payee has made an application, the Registrar must not make a variation to the Register where a low-income non-enforcement period under section 37B is in place in relation to the liability. [Item 4 - insert new subsections 39(6)and(7)]
4.20 Any elections made under section 38 or any applications made under section 39 which are received prior to the commencement date of Schedule 4 will be dealt with by the Registrar in accordance with the law applicable prior to the commencement of the Schedule.