Parents experiencing financial abuse feel abandoned and let down through the child support program, with advocates saying there is something broken at the heart of the system.
A report released by the Commonwealth Ombudsman on Tuesday found not enough is being done to identify and stop financial abuse through child support.
Services Australia's actions were found to be unfair or unreasonable in responding to "widespread manipulation and weaponisation" of financial payments.
The agency lacked policies, strategies and training to be able to proactively identify, monitor and respond to cases of abuse, the report found.
The ombudsman recommended the federal government introduce legislation to address limitations that impede Services Australia enforcement.
Information sharing and a requirement of abuse survivors to disclose sensitive details with their former partner should also restrained.
In Australia, there are about 1.1 million kids supported by the child support program.
Women are the main recipients of child support, which is usually paid for by men.
In a survey of more than 500 separated mothers, four in five said their former partner had used the program to commit financial abuse.
"We are being told of cases where former partners are ... deliberately not making payments or not lodging tax returns, lying to reduce their income, lying about care arrangements and being abusive or violent to stop the impacted parent from asking for help," the report reads.
Services Australia distributed $1.967 billion in payments in the 2023/24 financial year.
The investigation found as of December 2024 there was $1.9 billion in Child Support Collect debt and 153,694 paying parents had a debt.
Economic Justice Australia said the report highlighted the ease with which perpetrators could weaponise the system and inflict harm.
"However, what the scope of this report makes clear is that there is something broken at the heart of the social security system," CEO Kate Allingham said.
"It's mind-blowing that it is so easy for a perpetrator to inflict such profound financial harm on another individual, that they are so easily able to create a debt for a former partner which Services Australia is then required to pursue."
Commonwealth Ombudsman Iain Anderson said affected parents "keep telling us they feel abandoned and let down by Services Australia when they seek help for financial abuse in their child support cases".
Services Australia accepted all of the eight recommendations, while the social services department accepted all but one.
But Ms Allingham said real change would only come through legislative reform and called on the Albanese government to make this a priority of the next parliament.
"We don't know how many more spot fires the government needs to witness before they accept that there's a blaze," she said.
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