Explanatory Memorandum
(Circulated by authority of the Minister for Family and Community Services, Senator the Hon Jocelyn Newman)Chapter 11 - Debts offset Between Parents
Overview
11.1 Schedule 11 of the Bill amends the Child Support (Registration and Collection) Act 1988 (the Registration and Collection Act) to allow for debts between two persons who owe child support in respect of their children to be offset.
Summary of the amendments
11.2 The proposed amendments will provide for the parties to an assessment who each have a child support debt to the Commonwealth in regard to a common child, to have the amounts owed offset so that they are only required to pay the net amount to the Registrar.
11.3 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
11.4 Where two persons each have a child support debt to the Commonwealth, each person is required to pay the full amount of their individual debt. One person's debt cannot be offset against the other person's debt to arrive at a net amount payable.
Explanation of the amendments
11.5 A new section will be inserted so that where two persons owe money for child support, then the amount each person owes in relation to the other person may be offset against each other by the Registrar. [Item1 - insert subsection 71AA(1)]
11.6 The proposed amendment will provide that where a person has a debt equal to the amount of the other person's debt, then the amount of the debts may be completely offset. The Registrar will have a discretion to take into account the circumstances of the individual case when considering whether to offset the debts and how much may be offset. [Item 1 - insert subsection 71AA(1) & (2)]
11.7 Where the debts are not equal, the amendment will allow the person with the greater debt to have their debt reduced by up to the amount of the smaller debt. The amount of the smaller debt may be reduced by the amount that is offset against the larger debt. It is possible that the smaller debt may be totally offset. [Item 1 - insert subsection 71AA(3)]
11.8 Amounts that are offset will be taken to have been received by the Commonwealth. Additionally, any amounts offset will be taken to have been paid by the payer to the Registrar and paid by the Commonwealth to the payee. [Item 1 - insert subsection 71AA(4)] .
11.9 Where a person has had all or part of their debt offset against another debt and the other debt is later reduced, the person will be required to repay to the Commonwealth the amount (if any) that they have been overpaid. [Item 2 - repeal subsection 79(1) and insert new subsection 79(1)]