Media Statement - 13th December 2008
The Child Support Agency’s priority compliance programs targeting the tax returns of have delivered an $87 million bonus for kids in the past five months.
Collections from the two programs that intercept tax returns of parents with child support debts are 28 per cent higher than at the same time last year.
The total for the five months of the current 2008-09 financial year is made up of:
- $14m from the special Tax Lodgement Enforcement Program, targeting separated parents who don’t lodge returns
- $73m from the Tax Refund Intercept Program, which automatically redirects the tax cheque to the parents who are owed the child support debt.
“These are outstanding results, 28% higher than at this time last year, and well above the targets,” the Minister for Human Services, Senator Joe Ludwig said.
“Separated parents who refuse to pay child support can expect to have their tax refunds intercepted and redirected to their children.”
“Tax return intercepts have been very successful in recovering money for children of separated families around Australia.”
“The Child Support Agency has collected $211 million from the two tax refund programs since their inception in July 2006.”
The Australian Taxation Office advises the CSA when a tax refund is available and about to be repaid to a taxpayer who is also a child support payer.
The CSA may take the refund, credit it towards that person’s debt and transfer the funds to the receiving parent.
“Children may also miss out on the child support they’re entitled to if their parents don’t lodge tax returns,” Senator Ludwig said.
“The CSA needs income tax returns to properly assess the child support separated parents should pay or receive.”
Between 1 July 2006 and 31 October 2008, the CSA referred 378,145 customers to the Australian Taxation Office for lodgement enforcement.
This resulted in 132,937 customers lodging 228,149 tax returns and generating the payment of $49 million in outstanding child support through the interception of tax refunds.
For the 2007-08 financial year, all CSA parents must lodge a tax return, unless their taxable income was less than $18,252 and they received Australian Government pensions, allowances or payments over the entire period.
“It’s pleasing to see our priority compliance programs deliver these impressive results for children of separated families,” Senator Ludwig said.
“There are still too many parents trying to avoid their obligations to their children, but we are coming up with new ways to track them down.”
“This important compliance activity targeting tax refunds is going to be much more effective this financial year,” Senator Ludwig said.