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Moneypenny2014

**UPDATE** Centrelink Debt from 15 years ago!

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Moneypenny2014

For anyone who read my previous post about four Centrelink letters I received claiming I owed them $11k in overpaid family assistance from 12-15 years ago, I thought I would post an update.

As previously explained the first I had known of these debts was early September. I have never been contacted about them ever before in my life which I thought was odd.

After multiple phone calls to Centrelink they advised me that it was an error on Child Supports part whereby they apparently applied my second husbands income to my family income for the years that I was still married to my first husband!

I have no idea how this error occurred and was told it was a "system error".

The due date for repayment of the $11k+ was early last month and not surprisingly I had all sorts of problems with Centrelink's Debt Management Office because I was refusing to repay the amount either in full or part given Centrelink had confirmed it was a computer error that was going to be fixed and that the debts didn't exist. Furthermore, I don't have that kind of money lying around!

The notes from the people fixing it up were clearly entered into the system on 19 September but that did not matter, their debt recovery people expected payment. Thankfully, they assessed my income and expenses as a single parent with four children and established that I could not afford to make any repayments at the current time and extended the due date of the debt for a further 3 months.

Fast forward to today and I have been calling them once a fortnight for the last 2 months trying to hurry them up. I had been told it would be fixed but 2 months later it still wasnt.

Finally today I asked for the Complaints Department (thank you thank you thank you to the lady on here that suggested I call them). The girl I spoke to was incredibly helpful and after another 2 hour phone call to them (politely saying that I wasnt going to hang up until I knew the error had been fixed), she spoke to someone in their IT department and they are now just awaiting the correction to be signed off by someone higher up (which apparently takes a maximum of 5 days) and it will then revert back to how it was with a nil balance owing.

 

BUT whilst that is all good news, she has now told me that by refreshing the system a new debt has been generated from the 14/15 financial year! I was again a single parent at this time as my second husband and I separated in that year. The reason the debt occurred is that ex DH had not put in his tax return for that year until a couple of months ago and his income ended up being substantially higher than the estimated income Child Support used when calculating the child support payable. So effectively I had been paid too much Family Assistance because technically if he had of given a more accurate estimate of his income I would have received more child support.

 

My query now is, how is that my fault and why should I have to repay a debt incurred because his estimate of income was much lower than what he was really earning.

 

Has anyone else experienced this and what happened??

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Navy Blue

I'm glad that you got the first debt cleared, frustrating though that you had to spend so much time sorting out their error.

 

It doesn't seem like a great system, whereby you have to rely on xh giving an accurate income estimate to get your payment rate correct.

 

Are you on good terms with your ex? Did he end up paying you more child support for that period? If not, would he agree to pay off the debt for you in lieu of the child support?

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IamtheMumma

Unfortunately the second debt is common and it happens frequently. Its a flawed system. The govt doesn't care that he's pulled a swifty, they'll expect you to return the overpayment. Meanwhile, he can do a payment plan with the CSA to pay off the owed child support.

 

I hope they sort the first debt out properly.

Edited by IamtheMumma
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Murderino

You must have had a private collect arrangement in place at the time. The FTB legislation says in that case you must pay back the FTB and seek the higher CSA from him under your private collection arrangement (if it was CSA collect you wouldn’t have a debt instead any arrears they collect as a result of the change would affect the year you get the extra money).

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IamtheMumma

You must have had a private collect arrangement in place at the time. The FTB legislation says in that case you must pay back the FTB and seek the higher CSA from him under your private collection arrangement (if it was CSA collect you wouldn’t have a debt instead any arrears they collect as a result of the change would affect the year you get the extra money).

 

He's only just done his tax return for that financial year. The CSA will have used provisional rate for the 14/15 year. The CSA won't have known what his real taxable income was until he did his tax return a couple of months ago. A debt will still have occurred regardless of collection method.

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Murderino

No you can only get an FTB debt for a past year change to CSA entitlement if you were private collect at that time. If you were CSA collect then it won’t impact the past year that they have changed the assessment for it will impact the year i which CSA collect and pay you the extra.

 

I’m on my phone but when I’m home with iPad I’ll tryand find the guide to the Act and post it.

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Moneypenny2014

Yes it is a private collect arrangement but I don't actually receive child support at all from him, so if I do have to pay the "debt" back it will come out of my pocket completely and I have lost $$ on both fronts by way of family assistance and child support that I don't actually get.

Yes, I know it doesn't have to be like that but we have 40/60 care (I am the 60%) and a verbal agreement that we both pay 50% of school fees and 50% of all her clothing etc. He earns about $60k pa more than I do and I also have 3 other children to support from my first marriage.

But, he always buys her really lovely clothes (Country Road etc even though he's not into trendy clothes himself in the slightest!!) and he is honestly the perfect Dad to her.

Additionally he works really hard and grabs every overtime shift he can to try and get ahead financially. When he does work o/t, I have DD extra nights at my place as he works shift work which results in very early starts or late finishes.

I don't believe that I should be entitled to extra child support because he chooses to work extra shifts and earns more as a result so we agreed on no child support.

We do get on very well still and I would be willing to ask if he would repay the debt that I incur. I just hope he is understanding about it and as I don't want it to cause friction.

I was just moreso surprised that I had to repay a debt that was completely out of my control. I pity the poor parents who receive the bare minimum child support and then suddenly their ex partner wants to buy a house or whatever and decides to do their tax returns that show them earning tens of thousands more and the poor receiving parent has to pay the extra family assistance back :(

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Murderino

They will only have to pay it back if they have a private collection arrangement - if you have CSA collecting for you there will be no past year debt - if CSA collect arrears for that past year then it will reduce FTBA in the year they collect and pay it to you.

 

If I was claiming FTB and had maintenance income I would never go private collect for CSA.

 

I can’t find it in the guide though because my investigating skills are failing me right now!

 

ETA

I’m not saying I agree with it just that that is what the legislation says.

Edited by Murderino

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Murderino

Found in the act itself:

20D Working out amounts of child maintenance for administrative assessments privately collected

(1) This clause applies if, during a period in an income year:

(a) an individual is entitled to receive an amount of child maintenance for an FTB child of the individual under a liability under an administrative assessment (within the meaning of the Child Support (Assessment) Act 1989); and

(b) the liability is not an enforceable maintenance liability (within the meaning of the Child Support (Registration and Collection) Act 1988); and

© the child maintenance is not maintenance to which clause 20B applies; and

(d) the Secretary considers that it is reasonable for the individual to take action to obtain the amount.

Individual taken to have received full entitlement

(2) For the purposes of this Act, the individual is taken to have received, for the period in the income year, the amount of child maintenance for the child that the individual is entitled to receive under the liability, disregarding so much of that amount as is attributable to the individual receiving disability expenses maintenance.

 

 

It’s because if the part that says

“the individual is taken to have received, for the period in the income year, the amount of child maintenance for the child that the individual is entitled to receive”

- if you are private collect the legislation directs Centrelink to assume you have collected all of your entitlement and as there is no exclusion for the entitlement being reassessed years later a debt is raised where maintenance is reassessed to a higher amount for any given year, even if that happens years later.

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IamtheMumma

OP, I think you need to go into a branch and talk to Centrelink. While the Act does say what Murderino has posted, I don't read it the same way (as applicable to debts) and the DSS website says something different again.

 

 

Non-payment of child support arrears following a retrospective reassessment of child support - for periods post 1 July 2012

 

If, following a retrospective reassessment of child support, the individual advises that the liable parent is not going to pay the arrears owed, the individual should be advised that it may be in their interest to seek legal advice about enforcing the payment. If there are special reasons that make it unreasonable for the individual to collect the arrears, consideration can be given as to whether a retrospective partial exemption from the MAT would be appropriate.

If a retrospective assessment affects a past period where a deemed amount applied, FTB entitlements for that past period will be recalculated using the entitlement amount for that period as varied by the retrospective assessment.

However, where the individual had a partial exemption and was collecting less than their full entitlement, child support arrears that become payable for a past period as a result of the retrospective assessment will be counted in the year that they are actually received.

 

https://guides.dss.gov.au/family-assistance-guide/3/1/5/55

 

 

https://www.humanservices.gov.au/individuals/services/child-support/child-support-assessment/how-manage-your-assessment/compare-your-child-support-collection-options/private-collect

 

 

However, as soon as Centrelink find out you've agreed to no child support, that is going to make things ugly. You should be able to school fees as child support so it looks like you are getting it but choose to have it sent to the school instead of coming directly to you. Don't say you don't get it. (https://www.humanser...private-collect)

 

Many years ago, I made the mistake of telling them that I wasn't getting child support from my ex (money well spent to be rid of him). It resulted in FTB being lowered to the base rate only. There's some clause somewhere that says if you don't collect the amount you're supposed too (aka you accept less or none), then you're not entitled to the full FTB amount, only the base rate. This excludes DV situations were you can get an exemption. I had to go CSA collect. He wasn't happy but it was preferable to have him angry than the kids and I starving and homeless.

Edited by IamtheMumma

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