Commonwealth Ombudsman Iain Anderson has uncovered a significant breach in Services Australia's administration of child support payments, with the agency knowingly operating practices that did not align with legislation for a period of six years. The investigation found that Services Australia failed to properly apply child support law, potentially leaving numerous parents owed substantial sums of money.
Systematic Failure to Apply Legislation
The ombudsman's report reveals that Services Australia identified as early as 2019 that its internal child support practice conflicted with established law. The agency maintained a "longstanding principle" that parents providing less than 35% care of a child should not be eligible for child support, despite legislation clearly entitling such parents to receive some support from the other parent.
Iain Anderson expressed serious concern about the duration of this non-compliance, stating: "It was very important to fix these errors. But six years later, nothing's been done. And for all that time, Services Australia has not been applying the law."
Unacceptable Approach to Legislation
The ombudsman emphasised the fundamental problem with this approach, declaring: "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."
The investigation uncovered an attitude among some Services Australia staff that agencies should not have to implement the law in circumstances where it conflicts with the agency's preferred practice, or where application of the law may produce outcomes perceived as unfair.
Impact on Parents and Financial Consequences
While the exact number of affected individuals remains unclear, the ombudsman confirmed that at least 16,600 people are potentially owed money, with some cases involving amounts up to $10,000. Significantly, those affected have not been advised that the law was not being applied correctly.
Anderson acknowledged the complexity of the situation, noting: "Now the challenge with this is that those people are parents who didn't do the majority of the caring for the children. So there's no doubt that the legislation was producing unintended consequences."
Recommendations and Agency Response
The ombudsman has made six recommendations to address the situation, including retroactively legislating that parents doing less than 35% of the caring load cannot claim support, while offering compensation to those impacted.
Services Australia spokesperson Hank Jongen defended the agency's position, stating: "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. 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 confirmed the department would implement the recommendations by the end of January, with legislative amendments to fix the issue prioritised for 2026. Services Australia is also progressing an ICT solution to comply with current legislation as an interim measure.
Broader Context of Child Support Issues
This revelation follows last year's finding by the ombudsman that Services Australia was "amplifying" financial abuse in the child support system by not enforcing payments. At that time, $1.9 billion was owed, mostly to mothers who were disproportionately impacted.
Jongen acknowledged the need for reform, stating: "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. 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."
The situation highlights ongoing challenges in Australia's child support system and raises serious questions about administrative compliance with legislation designed to protect vulnerable families.
