Child Support System Being Weaponised for Financial Abuse, Ombudsman Found

The Ombudsman urges 8 key reforms, stronger enforcement, and legal changes to stop financial abuse in Australia’s child support system.

School students return back to school after COVID-19 restrictions were lifted at Glebe Public School in Sydney, Australia, Oct. 18, 2021. AAP Image/Bianca De Marchi

Parents are weaponising Australia’s child support system to commit financial abuse, with Services Australia’s passive oversight further compounding the harm, the Commonwealth Ombudsman has found.

According to the June 3 report, some parents are evading their obligations by deliberately withholding tax returns, misrepresenting earnings, and using threats or coercion to prevent the other parent from seeking help.

The Child Support program, which handles about half of all arrangements, failed to proactively detect or stop such manipulation, the Ombudsman said.

“Services Australia is not doing enough to actively deal with the weaponisation of the Child Support program. While its approach is well-intentioned and welfare-focused, it is not helping to get the money owed to parents when their kids need it the most,” quotes the report.

The Ombudsman found Services Australia’s approach was laid back in tackling the crisis.

“This passive approach is unfair,” he said.

Systemic Flaws Enable Deliberate Non-Payment

The investigation revealed that current policies do not require Services Australia to monitor whether payments in Private Collect cases—where one parent pays the other directly—are actually being made.

By law, the agency must assume full payment in these cases, even when abuse is suspected.

The agency also does not routinely investigate the motives of parents who avoid lodging tax returns or paying support, nor does it adequately train staff to recognise financial abuse.

The report highlighted that the Child Support legislation limits enforcement tools.

Garnishee powers, which allow authorities to take money directly from a person’s account or income to cover unpaid debts, cannot be used on joint or alternate bank accounts that many paying parents exploit.

The agency’s income estimation processes were also criticised as too lenient, with the same treatment applied regardless of whether non-payment was deliberate or not.

Tax Debts Pile up for Non-Receipt of Payments

Under current laws, if a parent is assumed to have received payments but didn’t because of financial abuse, they can still accrue a Family Tax Benefit Part A debt.

The system offers no mechanism to waive such debts, even when the support was never paid.

Changing from Private Collect to Child Support Collect also has its challenges. If there are arrears, the agency is legally restricted in what it can collect, further protecting abusers.

The Ombudsman concluded that enforcement tools are “unhelpful in some situations where financial abuse is taking place” and called for sweeping legislative reform.

However, it added that “while aspects of the current legislative framework should be amended,” the current legislative framework does not prevent Services Australia from implementing the recommendations.

Reforms Proposed to Fix ‘Weaponised’ System

The Ombudsman has put forward eight major recommendations to fix the system and urged Services Australia to develop a clear strategy with timelines.

These include improved staff training and better enforcement of payments by identifying abusive behaviours and proactively investigating cases where tax returns are not lodged.

A full review of the change of assessment process, often used by perpetrators to exploit loopholes, was also proposed.

Most critically, the Ombudsman urged the government to change laws that restrict enforcement, including allowing garnishee powers on shared bank accounts and scrapping the assumption that all payments are made in Private Collect cases.

The Ombudsman has asked the Department of Social Services and Services Australia to provide a progress update within 12 months.

Agency Promises Full Implementation

Services Australia quickly responded to the findings, thanking the Ombudsman and confirming it would adopt all eight recommendations.

“We’ll implement many of the recommendations by December 2025 and the remainder by June 2026,” a spokesperson told The Epoch Times.

The agency acknowledged the complexity of financial abuse and said it was working with the Department of Social Services, the Australian Taxation Office, and the Office for Women.

“While legislation limits some of the improvements we can make, we acknowledge there’s work we can do within the existing policy to better support parents who are Child Support customers and their children,” the statement said.