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Child Support and Debts

Child Support can arise in one of three ways:
1. Assessment by Services Australia: Child Support;
2. Child Support Agreements (binding or limited);
3. By Court Order. 

There are three ways in which Child Support is collected or received. 
Self Management: Where you arrange your child support payments without involving Services Australia. You and the other parents can agree on the amount, how and when to pay it and manage the payments between yourselves. 

Private Collect: Where there is a child support assessment, agreement or court order that sets out the amount however you and the other parents work out how and when to pay.

Child Support Collect: Where Services Australia determines the amount, when to pay, collects the money from the paying parent and transfers the money to the receiving parent. The benefits of Child Support collect is that there are no legal expenses, you do not need to prove any debt and enforcement applications by the Agency are usually heard fairly quickly. 

Prior to issuing enforcement of a child support debt, written notice from the person receiving payments (the ‘payee’) must be given to Services Australia of the intention to issue proceedings to recover the debt due, at least 14 days prior to issuing proceedings. 
The payee must also give the payer written notice to complete and serve a financial statement within 14 days after receiving the notice, before the payee can make an application.  The first order sought should be a declaration of the child support due. After this, the Court can proceed to making an enforcement order.

A child support debt can be enforced in the following ways: 
1. Enforcement warrant;
2. Third party notices to banks or employers;
3. Sequestration orders; and
4. Appointment of a receiver.

Enforcement Warrant
An enforcement warrant is used where there are houses or personal property of value that can be seized and sold by the Sheriff. An enforcement warrant does not have to cover the whole amount of the debt owing, it can be a partial amount to satisfy the debt. The person receiving payments is liable to pay the fees and expenses associated with the enforcement. 

Third Party Debt Notices
Debt notices can be issued in respect to money in a bank, wages/earnings from an employer or moneys payable to the payer from a third party. The payee must be able to identify the bank account and the amount of money in the bank account of the payer or if pay is sought, then the property legal identity of the payer’s employer and their legal address. A debt notice can also be used when a payee is aware of an inheritance, proceeds from a sale of property or a lump sum are due to a bank account or law firm. 

Sequestration of a property is rarely used in child support applications. This is where the person paying child support is deemed bankrupt and their property is then handled by a trustee. The Court must be satisfied that this is the most appropriate method of enforcing the child support obligation. 

​An application for a receivership is used where the payer is a director and shareholder of a company and is ‘hiding’ assets  or money in the company. The receiver can take control of a company and deal with the assets of the company. When making an application, the Court must consider the amount of debt, the amount to be recovered and the costs of appointing and paying the receiver. 

The method of enforcement used will depend on the individual circumstances of the payer, their assets and how they are held. The payer may need to be investigated prior to an application being issued to determine the exact assets and liabilities. 

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