The Commonwealth Ombudsman has issued a scathing rebuke of Services Australia, accusing the federal agency of deliberately flouting social security laws for more than six years. The watchdog's investigation found that staff knowingly ignored legal requirements regarding child support payments, choosing instead to follow internal practices they deemed fairer.
Agency Ignored Legal Obligations for Years
According to the Ombudsman's report, Services Australia was fully aware it was breaking the law when declining to enforce specific child support rules. The agency continued this non-compliance despite understanding its legal obligations, with the Ombudsman stating this behavior was "not acceptable" and undermined public trust in government institutions.
"The rule of law and trust in government are dependent on agencies complying with the law," the report emphasized, highlighting the fundamental importance of legal adherence in public administration.
Child Support Anomaly at Heart of Controversy
The issue centers on legislative amendments from 2008 and 2018 that created what officials describe as an anomaly in child support calculations. Traditionally, parents providing more than 65 percent of care for a child would never pay child support to the other parent. However, the amendments created situations where parents with minimal care could receive payments during specific gap periods.
Despite this legal framework, Services Australia systematically denied payments to parents with less than 35 percent care, effectively overriding parliamentary legislation with agency preferences.
Internal Culture of Law Avoidance
The investigation uncovered what appears to be a troubling attitude among some Services Australia staff. According to the Ombudsman, certain employees believed agencies should not implement laws when those laws conflict with preferred practices or might create what they perceive as unfair outcomes.
This mindset allowed the non-compliance to persist for years, with briefs detailing the legal violations drafted as early as late 2020 and early 2021. However, these documents failed to progress beyond mid-level management, meaning senior leaders and relevant ministers remained unaware of the deliberate law-breaking until late 2025.
Political Response and Remediation
Social Services Minister Tanya Plibersek has committed to introducing legislation to address the anomaly when Parliament resumes. A government spokesperson confirmed the Albanese administration's commitment to ensuring the child support scheme operates in children's best interests.
"It is a longstanding principle of the child support scheme that parents with less than 35 per cent care of a child should not be eligible for child support," the spokesperson stated, acknowledging the tension between established principles and current legislation.
Department of Social Services Secretary Michael Lye previously emphasized the department's commitment to ensuring laws reflect the principle that primary caregivers receive necessary support.
Scale of Impact and Historical Parallels
The child support anomaly affected approximately 10,000 cases, with individual financial impacts ranging from about $60 to more than $10,000 in debts or underpayments. The Ombudsman drew direct parallels between this situation and the robodebt scandal, noting that "knowingly and deliberately not complying with the law was at the heart of robodebt."
Greens social services spokesperson Penny Allman-Payne criticized the department's handling of the matter, suggesting the report demonstrates an apparent incapability to properly administer laws.
Recommendations Accepted
All six recommendations from the Ombudsman's investigation have been accepted by the relevant agencies. These include:
- Introducing retrospective legislation to correct the problem
- Informing affected individuals of their rights to seek compensation
- Implementing better escalation procedures for legal compliance issues
- Addressing cultural attitudes toward law implementation within Services Australia
The situation highlights ongoing challenges in balancing administrative discretion with strict legal compliance in Australia's social services system, raising questions about accountability and transparency in government agencies.
