Services Australia knew its internal practices relating to child support payments conflict with the law but did nothing about it for six years, a report from the commonwealth ombudsman has found.
In 2019, the agency identified that its child support practice that stipulated that parents with less than 35% care of a child do not receive financial support was not aligned with the law.
Legally, one parent providing less than 35% care of a child is entitled to receive some support from the other parent, but Services Australia said it has a “longstanding principle” that parents with less than 35% care of a child should not be eligible for child support as applying the law could result in situations where a parent with “little, or even no care, of children” receives payment from the main carer.
The ombudsman, Iain Anderson, said Services Australia knew for six years the internal processing conflicted with the law.
“It was very important to fix these errors,” Anderson said. “But six years later, nothing’s been done. And for all that time, Services Australia has not been applying the law.
“It’s just not acceptable for public servants to choose which parts of the legislation they’re going to apply and which parts they’re not going to apply.”
Anderson said it was not clear how many people have been affected, but at least 16,600 people were owed up to $10,000 in some cases.
People affected by this have not been advised that the law is not being applied correctly, he said.
“Now the challenge with this is that those people are parents who didn’t do the majority of the caring for the children,” Anderson said.
“So there’s no doubt that the legislation was producing unintended consequences.
“The problem is, though, this has been going on for six years without anything happening to fix it.”
The investigation found there was an attitude held by some staff at Services Australia that agencies should not have to implement the law in circumstances where the law conflicts with the agency’s preferred practice, or where application of the law may have unfair outcomes for some people.
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The ombudsman has made six recommendations to the department, including retroactively legislating that parents doing less than 35% of the caring load cannot claim support, but offer compensation to those impacted.
Services Australia spokesperson Hank Jongen said it was the department’s priority to ensure the child support program operates in the best interests of children.
“It is a longstanding principle of the child support program that parents with less than 35% care of a child should not be eligible for child support,” he said.
“If the legislative anomalies were applied in practice, there would be situations where parents with the majority care of children would be required to pay child support to parents with little, or even no care, of children.”
Jongen said the department would implement the recommendations by the end of January.
“The Department of Social Services has confirmed legislative amendments to fix the issue will be prioritised in 2026,” Jongen said.
“Services Australia is also progressing an ICT solution to comply with the current legislation as an interim measure pending legislative amendments.”
Last year, the ombudsman found Services Australia was “amplifying” financial abuse in the child support system by not enforcing payments. At the time $1.9bn was owed, mostly to mothers, who were disproportionately impacted.
The report made eight recommendations, including helping get back the unpaid support and tracking financial abuse.
“We’ve been open about the fact that reform is needed in the child support space to ensure payments are transferred on time, so children don’t miss out,” Jongen said.
“We’re already taking a range of steps to improve outcomes. This includes training for all staff to ensure they’re equipped to recognise and support people experiencing financial abuse.”
