Abbott government orders a halt to DHS's $600,000 pursuit of $6000

The case has now gone to mediation after social services minister Scott Morrison and human services minister Marise Payne ordered an end to the four-year legal saga.

The Canberra Times first revealed in December that more than half-a-million dollars of taxpayers' money had been sunk into the battle between the giant Department of Human Services and the father.

The bill has since sailed past $600,000, with seven taxpayer-funded lawyers on the case at one point, in February 2015, with most of their efforts directed at battling against the public release of case documents.

Independent senator Nick Xenophon, who accused Human Services of a "scandalous waste of taxpayers' money" in an effort to cover its own "butt", now wants legislative changes to ensure there can be no repeat of the saga.

The South Australian cross-bencher praised the two ministers for their "common sense" intervention into the case.

"I want to pay tribute to ministers Morrison and Payne, who helped common sense prevail," Mr Xenophon said on Thursday.

"At least now this litigation nightmare has ended, the next challenge is to advocate for common sense reforms to the child."

It is understood the father, a determined litigant known simply as "DT" because of strict Family Court rules on identifying parties, and the department have now come to a confidential settlement through a mediation process.

DT said simply the case was at an end and he could not comment further.

"The matter has now been resolved by mediation," he said.

The father began his legal fight in 2011 after he was pursued but the CSA for money he was adamant he did not owe, on the basis of an untested statement made by his ex-wife to the Family Court.

But the department argued the effort and expense of the litigation was worthwhile because it was defending an important legal principle allowing it to gather evidence of income.

Neither the department, senator Payne's office or that of Mr Morrison responded before deadline on Thursday to requests for comment.

Senator Xenophon is now seeking bipartisan report for law reform that would make it more difficult for false or reckless statements to be made about financial circumstances when families break down.

He said the reforms would provide important and long-overdue safeguards for mothers and children, as well as fathers, caught up in the child support system.

"There's an important principle at stake; that is if statements are being made, they need to be accurate," senator Xenophon said.

"This would probably help more women who are being hard-done-by, by a system where one party can make some or reckless statement and there isn't a fair outcome.

"Ultimately, this is about getting a fair outcome for the children.

"There is real scope for some sensible law reform here that would benefit those parties who have been short-changed by another party making false or reckless statement about their financial circumstances."