Malcolm Kenyon, 68, owes $17,000 in child support for his son, now 33, and $35,000 in unpaid maintenance.
In September 2007 Mr Kenyon was banned from leaving the country until he paid but took his case to the Administrative Appeals Tribunal to overturn it.
Deputy President Phillip Hack ruled Mr Kenyon should be allowed to live in Indonesia – where the cost of living is lower – but only if there is a guarantee that the child support debt can be taken from his old-age pension.
“Keeping Mr Kenyon in this country is not shown to be necessary to ensure that those repayments are made,” Mr Hack stated.
Mr Kenyon is currently paying $44 a fortnight toward the debt from his pension.
“At that rate it will take in excess of 12 years for the child support liability to be recovered,” Mr Hack stated.