CHAPTER 5 | looking at the agencies

The Child Support Agency (CSA) administers the Child Support Scheme. The Scheme, set up under the Child Support (Registration and Collection Act 1988 and the Child Support (Assessment) Act 1989, provides for the assessment, collection and disbursement of child support. The CSA's client group includes both payees (those receiving child support payments) and payers (those making child support payments).

In 2003–04, the Ombudsman received 1,951 complaints about the CSA, compared with 2,432 last year, a decrease of 20%, see Figure 5.5. Of the issues raised, the Ombudsman found agency defect in 7% of cases, showing a downward trend. The reduction in the number of complaints about the CSA is due primarily to the bedding down of the new CSA computer system introduced in 2002 (although this issue continued to generate complaints to the Ombudsman this year). As identified in earlier reports, it also indicates that CSA's internal complaint resolution processes are effectively addressing concerns raised by parents.

A complaint theme that arose prominently in the investigation of complaints about the CSA was that payers could find themselves unexpectedly being told that they had a child support debt. This tended to result from computer system changes or incorrect recording of payer or payee income details by CSA staff. Other recurring themes included complaints about the accuracy of information provided to parents, delays in providing information and breaches of privacy. A brief description of the scope of our investigations into some of these areas follows.

Debts

Some complainants approached our office after unexpectedly receiving a notice from the CSA that they had a sizeable child support debt. The investigation of these complaints highlighted two problem areas. First, a debt could arise if there had been a delay by CSA staff in making a manual adjustment to child support liability to take account of updated income information provided by one or other of the parents. Second, a parent could receive notice of a debt for a past payment period when current information was entered on the CSA computer system, which then automatically recalculated the parent's child support liability for the past assessment period.

The difficulties people experience in child support matters can sometimes arise because parents do not fully understand the features of the child support scheme. At other times, the difficulties stem from shortcomings in the administration of the child support scheme by the CSA. The following example of a complaint that we investigated illustrates the complexity that can arise in a child support case, and how parents can as a result be surprised or confused by actions taken by the CSA.

'The difficulties people experience in child support matters can sometimes arise because parents do not fully understand the features of the child support scheme.'

A payer's child support liability for a certain period had been assessed on the basis of an estimate of the parent's income. Some time later, the parents agreed between themselves that some of the child support owing for that period should be discharged. Notwithstanding that agreement, the payer was later told by the CSA that he had a debt for the period.

A combination of two factors produced this result. The first was that a child support assessment that is based on an estimated or deemed income is subject to reassessment once the actual taxable income is known. In this case, the result of the reconciliation was that too little child support had been paid for the earlier period, resulting in a debt for the payer. The second contributing factor to this problem was that there had been a delay of two years on the part of the CSA in making the reconciliation after learning of the taxpayer's taxable income. The delay, combined with the agreement between the payer and the payee to discharge the arrears, resulted in the payer being confused and uncertain as to the legitimacy of the child support debt.

The CSA advised that under child support law they were obliged to recalculate the payer's child support liability and raise a debt against him, notwithstanding that the debt related to a past period and was the subject of an agreement between the parents. We suggested that the CSA should offer the payer a complete explanation of what had occurred, apologise for the incomplete information provided to him about the reconciliation action, negotiate a fair repayment agreement with the payer, and remit any late payment child support penalties once the debt had been fully recovered. It is encouraging that some of these actions had already been initiated by the CSA.

We took up the question of administrative delay exposed by this complaint. We were advised that prior to the implementation of the new computer system in 2002, reconciliation of actual incomes was completed manually. The manual process had broken down in this case, as the error was not detected until data integrity checks were run in late 2003. The CSA's new computer system now automates this process and ensures that this issue will not recur.

'We took up the question of administrative delay exposed by this complaint.'

A suggestion agreed to by the CSA as a result of this investigation was that it would amend its procedural instruction dealing with debt recovery arrangements. The amendments will focus on the need for CSA officers to provide both payees and payers with full and comprehensive information about their rights and responsibilities, as well as the process for debt recovery. The changes also highlight the need for client service officers to review the entire case and to be aware of any estimated or provisional income prior to brokering a debt arrangement.

Errors in recording information

The essence of the child support scheme is that it specifies a formula to be applied in calculating the amount of child support to be paid by one parent to another. The formula takes into account a range of different factors, such as the number of children in each parent's care, the time spent by a child with each parent, and the income of each parent.

The formula is applied to data entered onto the system relating to those different factors. The integrity of the resulting decisions is conditional therefore on the accuracy and comprehensiveness of the information entered onto the system. This becomes all the more important when, as is often the case, many child support assessment decisions are made by the computer (or expert) system operated by CSA. The computer system can undertake some tasks without confirmation, and contains some built-in enforcement mechanisms.

'The integrity of the resulting decisions is conditional on the accuracy and comprehensiveness of the information …'

It is human to err, and errors sometimes occur in data entry. The difficulties that can result are illustrated by the following two complaints handled by the Ombudsman's office during the year.

In the first case, a payer with a child support debt had an arrangement for regular weekly payments to be withheld from his salary and to be applied to the debt. The arrangement was to continue for four years until the debt was reduced to a nominated amount, at which time the remaining child support debt would be discharged by the payee. Near to that time, the payer contacted the CSA, which advised that a small amount remained outstanding. The CSA also said that upon payment of that amount the CSA would remit all penalties that accrued over the life of the case because the payer had not paid his child support on time. The CSA failed to implement the agreement and instead intercepted the payer's tax refund when it became available. It released the full amount to the payee. The amount given to the payee was greater than the outstanding arrears.

On investigation, we found that the CSA had not correctly recorded the debt repayment arrangement on its computer system. The system showed the full amount of arrears owing without reference to the repayment agreement.

The CSA accepted that it had made an error and acknowledged the payer's commitment and adherence to the arrangement for debt repayment. Initially, the CSA advised that the payer would need to recover the overpayment direct from the payee. However, after we highlighted the inequity in this approach and drew attention to the reason both parties were in this position, the CSA agreed to refund the payer the remainder of his tax refund and to take responsibility for pursuing the recovery of the overpayment direct from the payee. While the CSA would not normally take this action, in the particular circumstances of this case the action was an appropriate resolution for these clients.

The second illustrative complaint concerned entries made on the Child Support Register. Under the child support law, the Child Support Registrar must enter certain information about each child support case in the Child Support Register. Changes to the Register must be made within a specified time after new information that could affect a child support assessment is received from a payer, a payee or a third party. The information entered on the Register is significant in that it sets the legal basis on which a child support liability is calculated.

In a complaint to our office, the payer had told the CSA that he and his current partner had had a baby. The Register should have been amended to record the child as a dependent child of the payer, but was incorrectly amended to record a liable child support assessment between the payer and the payee. The consequence of this error was that the assessment was based on the payer and the payee each having sole care of one liable child, when in fact there was only one liable child who was in the care of the payee. The payer's child support was accordingly assessed at a lower rate than it should have been. The error was identified days later and a new, updated assessment notice sent to the parents. The parents were not provided with any explanation of why a new assessment was issued.

The problem arose again following the introduction of the new computer system. The system automatically reverted the new child from dependent child status, to liable child status, thus again reducing the amount of child support payable by the father. This error was only discovered when the payee questioned the amount of assessment after a further change to the Register, more than 12 months later.

As the child support payments had been made under a private collection arrangement between the payer and the payee, the payee was not able to get the CSA to enforce recovery of the unpaid amounts, other than for the compulsory three months period provided for in the legislation.

'… we asked the CSA to review the content of current notices.'

On investigation, it seemed to us that neither the payer nor the payee had identified the errors because of the ambiguous format of the assessment notices they had received from the CSA. Changes have since been made by the CSA to the assessment notices, but we asked the CSA to review the content of current notices to ensure that an error of this nature would be easier to identify in the future. Furthermore, we noted that the CSA had not provided an adequate explanation to either party, even though the matter had been subject to a complaint from the payer's Federal Member. We also learned that the CSA had not formally apologised to either party for the error and asked that it attend to this matter with urgency. The CSA has since issued an apology.

Advice on recourse options

If a parent has overpaid or been underpaid, reconciliation of the debt can be foremost in their mind. They are likely to turn to the CSA in many cases for advice on whether they have any recourse, and the options available. It is important that any advice given to a parent is both accurate and realistic.

The point is illustrated by one complaint we investigated. A payer had made an overpayment because of a CSA computer system error. He was advised by the CSA that he could either make a gift of the overpayment or take the payee to court to seek a civil remedy for repayment. While those were two options, our concern was that the CSA had neglected to suggest as an additional remedy that the payer could lodge a claim for client compensation on the basis that the error constituted defective administration by the CSA resulting in financial loss.

Information provided to parents

Another aspect of the child support scheme, about which parents rely on the CSA for advice, concerns the private collection of child support. Arising from some complaint investigations we undertook this year, we suggested to the CSA that it should evaluate the adequacy of the information made available to parents about private collection.

'We suggested to the CSA that it should evaluate the adequacy of the information made available to parents …'

It is open to parents for whom a child support assessment has been made to make a private and informal arrangement for payment of a lesser child support amount. However, if the payee later arranges for the CSA to collect child support, the CSA will collect at the rate specified in the child support assessment, not the rate agreed between the parents. Furthermore, it is open to the payee to request the CSA to seek three months of arrears payment from the payer (up to nine months in exceptional cases) equal to the difference between the CSA-assessed child support amount and the amount agreed privately between the parents.

Not surprisingly, some payers feel aggrieved when action is taken by the CSA to collect an amount greater than the payer understood they had agreed to pay. It is important in such instances that parents are fully aware, from any advice or information they obtain from the CSA, of the ramifications of making a private collection agreement.