Sam: Delays in information‑sharing disadvantage child support recipients

Sam tipped off the ATO that their ex-spouse had not lodged their tax returns. The ATO applied its usual lodgement enforcement actions and sent a ‘re-engagement letter’ to the ex-spouse, who failed to comply by lodging their tax returns.

Sam made further tip-offs to the ATO when the tax returns were not lodged, and the ATO sent a further re-engagement letter, a voice message, and a final warning letter to the ex-spouse, who still failed to comply. As the case did not meet the ATO’s parameters to proceed further, it took no further action. Without accurate tax returns, Services Australia and Child Support cannot reliably calculate child support payments, which may have resulted in under- or over-payments.

In the 2024 financial year, the ex-spouse appeared on the ATO’s risk radar for multiple reasons: a high number of outstanding obligations, evidence of income over a certain amount, and a child support referral from Services Australia. The ATO began enforcement actions, including creating a child support case and issuing a default assessment warning letter. This prompted the ex-spouse to lodge all outstanding tax returns.

The new tax information will allow Services Australia and Child Support to recalculate Sam’s payments. If Sam was underpaid, this will be corrected, but the impact of the delay and reduced payments will already have been done. If Sam was overpaid, Services Australia may raise a debt to recover those payments, which Sam will be liable for, reducing future payments as a result.