Chapter 6
Looking at the agencies
Child Support Agency menu: Introduction | Own motion investigations | Complaint themes |
Introduction
The Child Support Agency (CSA) is a program within the Department of Human Services. The CSA has two main functions:
- to make administrative assessments of child support payable by a parent to the person caring for their child (usually the child's other parent)
- to register, collect and transfer amounts payable for child support from the liable parent (the paying parent or payer) to the person with primary responsibility for caring for the child (the receiving parent or payee).
The CSA works in the difficult area of family breakdown, and it is not unexpected that there can be a complaint from one or other party. A particular challenge facing the CSA is to ensure that its processes do not unintentionally inflame or disrupt the relationship between separated parents, or unduly affect the arrangements those parents have made for their support of their children.
In 2008–09 we received 2,471 approaches and complaints about the CSA. This was an increase of 12% from the 2,208 complaints and approaches we received in 2007–08, and the highest number since 2002–03 (2,515). This increase was greater than for any other major agency. Our analysis of the complaints does not point to any single reason for the continued growth in CSA complaint numbers. We have identified some prominent themes, discussed below. Figure 6.4 shows the trend in approaches and complaints about the CSA over the last five years.
Many of the complaints we receive about the CSA's decisions could be addressed in another way. For example, a parent could lodge an objection to a disputed decision with the CSA or apply to the Social Security Appeals Tribunal for review. The CSA also has an internal complaints service to deal with other matters not subject to review, such as complaints about delay, rudeness, or general service delivery. In general we expect people to use these options before we consider investigating a complaint. Given the complexity of the system, sometimes it is necessary for us to contact the CSA to get a proper understanding of the nature of a person's complaint and the avenues available to the person to address it.
We investigated 29% of the CSA complaints that we finalised in 2008–09. When we investigate complaints, we focus on identifying whether the agency has acted reasonably in the particular case. We assess this in the context of the CSA's role, the relevant legislative framework, and taking into account the circumstances of the payer and payee, and by extension, the children. We also consider whether the complaints we receive indicate any systemic weaknesses in the CSA's processes. We draw such issues to the CSA's attention through the individual complaint, by discussing the broader problem with senior CSA staff in one of our regular meetings, or by conducting an own motion investigation.
FIGURE 6.4 Child Support Agency approach and complaint trends, 2004–05 to 2008–09
TopOwn motion investigations
CSA's response to allegations of fraud
In November 2008 we published a report Child Support Agency, Department of Human Services: Responding to allegations of customer fraud (Report No. 12/2008). The report highlighted inadequacies in the CSA's processes for identifying customer fraud, including its arrangements for assessing fraud reported by a member of the public. We made five recommendations. Four recommendations were aimed at improving the CSA's processes in order to better safeguard the integrity of the child support scheme. The other recommendation was for the CSA to reconsider its handling of a specific case, where its failure to investigate a parent's income led to the other parent suffering financial loss.
The CSA accepted all our recommendations about its processes for responding to customer fraud. The CSA also agreed to provide a remedy to the specific complainant, compensating her for her legal costs and refunding the child support that she had overpaid.
Departure Prohibition Orders
In June 2009 we published a report Child Support Agency: Administration of Departure Prohibition Order powers (Report No. 8/2009). This report analysed the CSA's processes for making a Departure Prohibition Order (DPO), which can be used to stop a parent with a child support debt from leaving Australia. The report examined a sample of DPO decisions. We found weaknesses in the CSA's procedures, and deficiencies in each case examined. We made eight recommendations in the report. Six recommendations were aimed at improving the CSA's administration of its DPO powers. We also recommended that the CSA review all the cases where a DPO was in force to ensure that the decision was valid and appropriate, and that the CSA consult with its policy department (the Department of Families, Housing, Community Services and Indigenous Affairs) about the suitability of the current arrangements for challenging DPO decisions. The CSA largely accepted the recommendations.
Complaint themes
New child support formula
On 1 July 2008 the legislative formula that the CSA uses to make an administrative assessment of child support changed. Our 2007–08 annual report acknowledged the CSA's thorough preparation for the start of the new formula, including the efforts it made to ensure that its customers were aware of the changes. Our monitoring of CSA complaints in 2008–09 did not suggest any major implementation problems.
We received a small number of complaints that suggested the CSA's computer system was not programmed to handle all the possible variations in the family arrangements of its customers. In at least four cases where the child was in the care of a person other than a parent, the CSA was unable to make an accurate child support assessment promptly. One carer did not receive any child support for nine months because the CSA was unable to make an assessment of the child's parents' liabilities under the formula.
Objection delays
Our 2007–08 annual report noted the CSA's considerable backlog of objections—that is, customer requests for an internal review of a CSA decision. In most cases the CSA is obliged to make a decision on an objection within 60 days of receiving it. In 2007–08 it met this obligation in only about 77% of cases. The CSA introduced new arrangements for the distribution and monitoring of objections, which have reduced the backlog and improved the timeliness of its decisions. The CSA has also built expertise in particular teams that concentrate on specific types of objections, which it says has improved the quality of its decisions. It finalised 85% of objections within 60 days in 2008–09. This is better, but the CSA is still not meeting the timeframe required by Parliament in a substantial number of cases.
Estimate reconciliations
Initially a child support assessment is based on a parent's most recent tax assessment. If the parent's income has reduced, he or she can elect to have the CSA use an estimate of their current income. Once the parent lodges their tax return, the CSA compares the estimate with the tax assessment. If the estimate was too low, the CSA adjusts the assessment. This process is referred to as an 'estimate reconciliation'.
In our 2007–08 annual report we noted that as at 31 March 2008 the CSA had around 200,000 unreconciled estimates. This is an area of ongoing concern. In June 2009 the CSA advised us that it had around 207,000 cases with incomes that needed to be reconciled, and a further 190,000 unreconciled estimates awaiting lodgement of the parents' tax returns. In the 2009–10 Budget the CSA was allocated $85.8 million over three years to complete the outstanding reconciliations. We continue to monitor the CSA's progress in this area.
Failure to collect child support
Around 12% of the complaint issues that we investigated related to the CSA's alleged failure to collect child support. This was the most common issue we investigated, as it was in 2007–08. We consider this is an important part of our role in relation to CSA complaints. For privacy reasons, the CSA is generally reluctant to provide the payee with detailed information about the steps that it has taken to collect outstanding child support and it does not include the payee in any negotiation with the payer to reach a suitable payment arrangement. However, the CSA can provide that information to the Ombudsman's office for the purposes of an investigation. Even though we are not able to pass on all the details to the complainant, we are often able to provide an objective assessment of whether the CSA has taken reasonable action to collect arrears from the payer. In some cases, the CSA will take extra steps following our investigation.
The 2009–10 Budget allocated the CSA $223.2 million over four years to reduce the growth in child support debt and maintain customer service standards. We will continue to monitor the CSA's performance in this area.
Payee overpayments
A payee can be overpaid when the CSA retrospectively reduces the child support assessment, or if by error the CSA paid an amount to the payee without first having received it from the payer. In 1998 this office published a report of its investigation of the CSA's processes for raising and recovering child support overpayments from payees: Child support overpayments—A case of give and take? Following that report, we received few complaints about payee overpayments. This was partly due to changes to the child support legislation, which limited the CSA's power to make a retrospective decision. The CSA also improved its approach to overpayments in response to that report.
This year we started to receive complaints that the CSA had intercepted tax refunds to recover overpayments from people who had previously been payees. Some of these debts were more than a decade old. In some cases the CSA had never provided the person with a written explanation of the debt.
Our investigation of these cases revealed that the CSA had started recovering these old debts after 1 January 2008, when its power to intercept and apply tax refunds to a child support overpayment was reinstated. Approximately 20,000 cases were involved. The CSA has now accepted that it may not always be reasonable for it to recover these debts after such a long delay. In several cases the CSA has agreed to explore the possibility of waiving at least part of the debt because of the circumstances in which the debt arose and the fact that recovery may leave the person worse off than if they had not been overpaid. The case study No deductions shows one such case. The CSA is currently reviewing all payee overpayments over five years old to decide whether it is now appropriate to recover them.
No deductions
Ms N complained that the CSA took her tax refund of $900 in July 2008, without warning, to recover an overpayment that occurred in 1997.
The CSA had paid $4,000 to Ms N as child support in 1996 and 1997. The CSA had notified the employer of Ms N's former husband (Mr O) to deduct these amounts from his salary, and it had made payments to her for the same amounts. In 1997 the CSA reconciled its accounts and found that no deductions had been made, because Mr O had left his job.
In 1997 the CSA told Ms N that she had been overpaid. It negotiated to recover the debt from her ongoing child support payments. The CSA did not send Ms N a statement for the debt or advise her of the balance. When her child support case ended in 2004, she believed the debt was settled. However there was still $2,500 owing.
When Ms N complained to the CSA in 2008 about it taking her tax refund, they acknowledged they failed to provide her with advice about the debt after 2004. The CSA released her tax refund, but said she still owed $2,500.
When we investigated Ms N's complaint, we found that she had been receiving a Centrelink benefit at the time of the overpayment. This payment had been reduced by $1,300 because of the child support that she had been overpaid. She was not able to ask Centrelink to pay her the $1,300 because of the time limits for a person to claim arrears. We pointed out to the CSA that recovering the full amount of the overpayment from Ms N would leave her $1,300 out of pocket. The CSA agreed to our suggestion that it approach the Department of Finance and Deregulation for approval to waive recovery of at least that part of Ms N's debt. The CSA undertook to seek waiver of the entire amount.
Confusing CSA letters
Complainants regularly tell us that they find the CSA's letters hard to understand. Many people find it difficult to follow the CSA's assessment notice, which sets out all the information that the CSA uses to work out the rate of child support, as well as showing the total amount payable. We consider that individual CSA notices are reasonably clear. However, the CSA often sends multiple notices to people, covering different periods. They rarely include a covering letter that clearly explains why they have issued the different notices or what information has changed. In 2008–09 we brought three such cases to the CSA's attention, and asked them to consider how they could present information more clearly to their customers, especially those who have more than one child support case. The CSA has agreed that it should improve its letters to address the problems that we highlighted.
Managing complex cases
Given the sensitive area that the CSA works in, it is important that it carefully considers the possible impact of a decision upon the people who will be affected before it makes that decision. The CSA may need to check its understanding of the facts before it makes a change to a case, to make sure that nothing else has changed. Where it is likely to make a decision with retrospective effect, it should explain any alternatives to the parents before finalising the decision.
Sometimes a simple error can lead to complex problems, as the case study Wrong date shows.
In other cases, agreements and court orders for child support are complicated and can be interpreted in a number of ways with different results. We investigated three complaints about the CSA's administration of complex court orders or agreements. Those complaints suggest that the CSA needs to improve its processes for identifying inherently complex cases, deciding how it will administer them, communicating those decisions to the parents, and advising them of their rights to challenge the decision if they disagree. The case study Fares in lieu shows one example of the difficulties that can arise.
Wrong date
In 2001 Mr P and his former partner made an agreement about the rate of child support that he would pay for their children. The CSA accepted the agreement and issued an assessment for the agreed amount. The agreement was to last for three years, with annual updates for inflation.
The CSA adjusted the assessment each year as required by the agreement. However, it made a mistake one year and changed the end date of the agreement to the date the youngest child would turn 18. Neither Mr P nor his former partner realised the mistake. Mr P paid child support to the CSA each month according to the CSA's assessment and the CSA transferred the money to his former partner.
In June 2008 the CSA rang Mr P to tell him that it had discovered the agreement should have ended in 2004, and that the usual child support formula would apply to his case from that date. The CSA officer told him that he now owed the CSA an additional $37,000. He later received notices from the CSA which advised that he actually owed more than $65,000.
Mr P complained about the CSA's failure to give him advance notice of the intended change. He said that the care arrangements for the children had varied since he and his partner made the agreement, and that he had made a number of payments that the CSA could have credited against his debt. These would affect the accuracy of the CSA's decision. He said that the CSA did not give him any advice about his options, or even an opportunity to tell them about these matters.
During the course of our investigation, the CSA allocated a special case officer to Mr P and his partner to assist them to work through their child support options. As a result, Mr P's debt was reduced substantially. We advised the CSA that we considered that the earlier process it followed for correcting the error was not appropriate, given the time that had passed and Mr P's reasonable reliance on the CSA's advice of what he was required to pay.
Fares in lieu
Mr Q and his former wife obtained court orders about residence and contact for their children, in anticipation of the children moving interstate with their mother. As part of the proceedings, they agreed that Mr Q would pay the cost of the children's airfares for their contact visits with him. The agreement stated that these payments were 'in lieu of child support payments'.
Mr Q provided a copy of the agreement to the CSA after it issued an assessment of child support payable by him. The CSA considered the agreement and decided that it would administer it by crediting any amounts that Mr Q paid for airfares against what he had been assessed to pay under the child support formula. Mr Q was still liable to pay any difference to the CSA. Mr Q complained repeatedly to the CSA about this interpretation. He said that he and his former wife intended that he would only have to pay the cost of the children's airfares, and not be liable for any additional child support.
We investigated Mr Q's complaint. We found that although the CSA had considered the interpretation of the agreement on several occasions, it had never provided Mr Q and his former wife with advice about its decision in a form that they could object to, nor any advice about their rights in this regard. The CSA accepted our finding that the process it had followed had been deficient and undertook to advise the parties of their objection rights. The CSA told us that it was already in the process of delivering training to its staff about interpreting court orders and agreements, and that it would review its procedural instructions to ensure that they emphasise the need to provide customers with written advice of the interpretation and their right to object to it.
Interaction between family tax benefit and child support
The child support scheme interacts with, and can affect, some payments administered by Centrelink. For example, a person must take 'reasonable maintenance action' for a child after separation, in order to qualify for additional family tax benefit (FTB) for that child. In most cases, 'reasonable maintenance action' involves applying to the CSA for an assessment of child support, and either collecting 100% of the assessed amount privately from the other parent or applying to the CSA for collection.
In most cases, Centrelink advises an FTB recipient or applicant about the requirement to apply to the CSA for an assessment of child support payable by their former partner/child's parent. The trigger for that advice is usually when the person tells Centrelink that they have separated, or that they now have care of a child. The CSA and Centrelink also share certain information about changes of care for children, or when FTB or child support is cancelled. Each agency reviews their records when they receive advice about a change in the other agency's records, to see if they need to amend the case. Any failure in those liaison and review arrangements can lead to substantial detriment to a parent with care of a child.
We investigated a number of complaints about the interaction between the CSA and Centrelink in relation to the reasonable maintenance action test. These complaints revealed a range of problems, including a lost opportunity to receive child support, a person receiving a reduced rate of FTB, and a liability to repay substantial amounts of FTB to Centrelink. In some cases Centrelink decided to waive recovery of the FTB debt and the CSA considered paying compensation to the payee for their lost opportunity to receive child support. We intend monitoring this problem in the coming year.
CSA's 'capacity to pay' investigations
The CSA's 'income minimisers' project is one way in which it seeks to ensure the integrity of the child support scheme. This project targets cases where a parent's taxable income is not a true indicator of their capacity to support their children, either because of the way their financial arrangements are structured (including some legitimate arrangements for tax purposes), or because they are involved in the 'cash economy'. If the CSA believes that the parent has a greater capacity to pay, it can start a process to change the assessment, which includes an investigation into the parent's capacity to pay.
We have investigated several complaints which raised concerns about the CSA's processes for managing personal information in the course of these investigations, including information about related people, such as a parent's new partner. We will conduct a more detailed investigation of the CSA's 'capacity to pay' process in 2009–10.
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