Last updated 8 August 2016
If parties cannot agree on the amount of maintenance to be paid, an application for maintenance must be made on an initiating application. An affidavit and a financial statement must accompany the application. This is generally filed in the Federal Circuit Court.
If parties can agree on the amount of maintenance to be paid, they can prepare and file an application for consent orders in the Family Law Court.
The court order can be registered with the Department of Human Services – Child Support (DHS – Child Support) for collection. It is important to note that the court cannot make orders relating to child support/child maintenance where the Child Support (Assessment) Act 1989 (Cth) (CS(A) Act) applies. Consent arrangements relating to child support can be formalised by a binding or limited child support agreement.
Wording of the order or agreement
A maintenance order or agreement (e.g. a binding financial agreement for spousal maintenance, or binding or limited child support agreement for child maintenance) should clearly state:
- who is to pay maintenance and who is to receive it
- the names of the relevant children (including their birth dates for clear identification)
- how much is to be paid per child and when these payments are to cease for each child (if more than one). The amount payable should be set out in both words and figures, and it should be clear when it is payable (e.g. weekly or fortnightly).
The need to return to court in future can be minimised by allowing for Consumer Price Index (inflation) increases and by providing for the reduction of payments to a nominal amount whenever the payer is unemployed.
If the DHS – Child Support is asked to collect the money, only a sum of money that can be worked out by reading the orders or agreement can be collected. The DHS – Child Support cannot collect a reimbursement for categories of expenses (e.g. medical expenses, school fees or uniforms) where the amount of the expense is not expressly stated on the order or agreement. There is a form to complete to ask the DHS – Child Support to register an agreement.
The court hearing
Once an application for maintenance has been filed with the court (and a copy of the application is served on the other party), the court will conduct a hearing to determine whether maintenance is payable and how much should be paid. Each party will have an opportunity to present their case to the court. Each party is required to bring relevant disclosure documents to the hearing (e.g. each party’s most recent tax return and assessment, recent pay slips, bills and banking records for the previous 12 months). The court can only make a decision based on the information presented to it, and it may draw adverse inferences if a person refuses or fails to prove the details of their financial circumstances.
Once the court has heard all available evidence, a decision will be made about whether maintenance is payable and how much should be paid (s 66G Family Law Act 1975 (Cth) (Family Law Act)). Generally, a court will not backdate the order to allow maintenance to start on an earlier date, so the order for maintenance will commence on the day it is made.
Enforcement of spousal maintenance and child maintenance
When maintenance payments or child support payments are in arrears, several methods may be used to enforce payment under the Child Support (Registration and Collection) Act 1988 (Cth). Enforcement of arrears may involve the bringing of an application to have the payer orally examined before the court about all matters relating to the refusal or failure to pay. Although an oral examination before a court does not force the payment of arrears, it may make enforcement simpler because the payer has provided details of their income and assets.
If an order is registered with the DHS – Child Support for collection, the department can only collect arrears accrued after registration with the department. Similarly, the DSH – Child Support can only collect a sum of money specified in an order or agreement.
Methods most commonly used by the DHS – Child Support to collect arrears include:
- garnishment of a payer’s wage or bank account
- intercepting a taxation refund
- seizure of property and sequestration of the estate of the defaulter
- compelling a third party (e.g. the defaulter’s bank or employer) to give financial information about the defaulter. To obtain information about a defaulter’s ability to pay arrears, an application for an oral examination of the defaulter can be made to court. A payee can help the DHS – Child Support to speed up the enforcement process by supplying the department with as much information as possible concerning the liable parent’s financial situation
- suing a defaulter to recover arrears (although this is usually only done after other options have been exhausted).
People with court orders who have never registered with the DHS – Child Support for collection will need to take their own enforcement proceedings. Payees can commence their own enforcement action in court, even if the DHS – Child Support is also responsible for collecting child support.
Garnishment is the DHS – Child Support’s most commonly used procedure. An order for garnishment will usually be served on the payer’s employer. The employer must deduct a certain amount from the payer’s wages and pay it to the DHS – Child Support. A payer’s bank account can also be garnished. The DHS – Child Support can compel third parties holding money for a payer in arrears to pay funds held to the agency. This can apply to funds held in a solicitor’s trust account.
Interception of tax refund
If a child support payer is entitled to a taxation refund, the refund will usually be intercepted by the DHS – Child Support. The money intercepted is paid to the parent entitled to child support in reduction of any arrears of child support owed by the liable parent.
Seizure of property
Seizure of property is not a common method of enforcement. However, orders may be obtained to seize and sell personal property, and the proceeds are applied to payment of arrears.
The use of sequestration is rare. When a person does not pay arrears, the court may order that the payer’s estate be sequestrated. This means that the entire payer’s real and personal estate (excluding clothes, bedding, kitchen furniture, tools of trade worth up to $3550 and some other personal things) vests in a receiver. The court can make further orders concerning the disposal of this property. It has been held, however, that a sequestration order does not give the receiver any power to sell the property.