Appendix 1: Characteristics of child support debt

Inland Revenue Department: Managing child support debt.

Total child support debt at the end of 2008/09 was $1.56 billion (comprising $540 million of unpaid child support payments and $1.02 billion of unpaid penalties). Because all penalties are paid to the Crown and some child support assessments are paid to the Crown in reimbursement of a benefit, about $195 million is owed to custodians with the remainder owed to the Crown.

The nearly $1.56 billion in total child support debt as at the end of 2008/09 was made up of:

  • $363 million (23.3%) in instalment debt – owed by people who had made arrangements with Inland Revenue to make regular payments (excluding collection cases handled by the Australian Child Support Agency);
  • $407 million (26.2%) owed by people living in Australia who had made arrangements to make regular payments to the Australian Child Support Agency as part of Inland Revenue's reciprocal agreement;
  • $536 million (34.5%) deemed by Inland Revenue to be not yet under arrangement, covering cases where it was considering legal action against people unwilling to make regular payments; and
  • $249 million (16.0%) recorded by Inland Revenue as uncollectible debt. Payments were unlikely because people were in prison, in hospital, or unable to be found.

The number of people owing child support debt has declined since 2005, although the total outstanding debt has increased during this same period. The increase in debt is caused by an increase in the number of liable parents owing larger child support debts. Figure 10 shows that, despite a reduction in the overall number of debtors during this period, the number of people owing more than $50,000 has been rising each year.

Figure 10
Number of cases with a debt, by value of debt, from 2005 to 2009


 2005 2006 2007 2008 2009
<$1,000 61,823 55,354 54,650 53,742 53,588
$1,000-5,000 37,173 37,835 37,671 37,936 38,391
$5,000-10,000 13,955 14,279 14,286 14,538 14,935
$10,000-50,000 19,539 19,104 18,377 18,976 19,684
$50,000-100,000 2,769 3,845 4,213 4,516 4,635
>$100,000 746 1,185 1,666 2,318 3,301
Total cases 136,005 131,602 130,863 132,026 134,534

Figure 11 shows that the same trends as those shown in Figure 10 have been occurring with the growth of the amount of debt owed. The levels of outstanding debt have been relatively stable under $50,000, but debts of $50,000 or more have grown significantly.

Figure 11
Amount of debt owed, by range of debt, from 2005 to 2009


 2005
$m		 2006
$m		 2007
$m		 2008
$m		 2009
$m
<$1,000 18.3 16.2 15.6 15.8 16.0
$1,000-5,000 92.1 94.7 84.9 95.6 96.4
$5,000-10,000 99.6 101.5 101.8 103.3 106.0
$10,000-50,000 447.6 430.8 405.8 418.4 436.1
$50,000-100,000 187.1 259.1 288.4 320.2 331.3
>$100,000 109.6 179.5 261.2 384.6 570.0
Total debt 954.2 1,081.9 1,167.7 1,337.9 1,555.8
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