Answer
Being contacted by Services Australia about child support deductions can be unexpected, but in most cases it is not a sign that anything is wrong. This is usually caused by how Single Touch Payroll (STP) Phase 2 data is interpreted when pay dates or deduction timing change.
Under STP Phase 2, reporting child support deductions is optional. If you do report them, Services Australia monitors the timing and frequency of the deductions reported through STP. When their system detects something that looks different from the usual pattern (such as a change in pay date, pay cycle, or deduction timing), they are legally required to contact the employer to confirm what is happening.
A common example is where the pay period covers one set of days (for example, Thursday to Wednesday), but the actual payment is made on a different day (such as Friday). Even though this is valid payroll practice, it can look like a schedule change to Services Australia and trigger a follow-up call.
These contacts are almost always routine. Based on guidance we have received from the ATO STP technical team, they rarely result in any action being required by the employer and can generally be treated as informational only.
If you would prefer to avoid being contacted about child support deductions, you can choose not to report them as child support through STP. Instead, set the deduction classification to Normal. This is safe to do because reporting child support deductions via STP Phase 2 is optional.
To change the classification for future pays:
- Go to Employees >> Allowances/Deductions >> Deductions
- Edit the relevant deduction
- Change the classification to Normal
This change will only apply to pays going forward.
To update the classification on past pays:
- Go to the Tools menu and open the Retrospective Tool
- Select the employee and the required date range
- Update the deduction classification in bulk
Using the retrospective tool does not change the pay amounts or payroll history. It only changes how the deductions are classified and reported through STP.
If you are unsure which option is best for your situation, or you need help making these changes, please contact support and we can assist.