A number of reforms to the child support scheme were announced today by the Minister for Social Security, the Attorney General and the Assistant Treasurer.
The reforms underscore the fundamental principle that parents are primarily responsible for the financial support of their children.
The newly announced reforms include:
- the introduction of legislation to prevent persons with substantial child support debts leaving the country;
- the establishment of an inter-departmental Committee to consider the diverse forms of income received and taken into account for determining child support;
- a review, by the Child Support Registrar, of the Departure from Assessment process; and
- the establishment of a number of pilot schemes to assist parents in complying with contact orders.
Details of the reforms are included in the attachments to this release.
The Government yesterday introduced in the Parliament further changes to the Child Support Scheme designed to provide more flexibility for those child support payments not made through the Child Support Agency. The changes, which are outlined in an attachment to this release, were announced in the 1998-99 Budget by the Minister for Social Security, Senator Jocelyn Newman and are part of the Governments package of reforms to improve the Schemes flexibility, provide greater equity, and more regular financial support for children.
15 May 1998
Contact:
Penny Farnsworth:
Senator Kemps Office
(02) 6277 7360
Jane Henschke
Senator Newmanss Office
(02) 6277 7560
NON-AGENCY PAYMENTS
Arrangements for direct (non-agency) payments in lieu of a child support liability have been changed in order to make them more flexible and allow payers more choice in the form in which child support is paid by them, while protecting payees and meeting the basic needs for children.
The changes are:
- Certain payments can be credited towards a payers child support liability up to a limit of 25% without requiring the payees agreement, provided the balance of child support is paid, commencing on 1 July 1999.
- The following items will be included in the Child Support Regulations fees charged at the school or pre-school at the child is enrolled; essential medical and dental fees; payee rent, including bond and body corporate charges; payee rates; payee mortgage; payee utilities; payee child care costs; and payee motor vehicle costs, including registration, insurance, service, tyres, repairs and panel beating.
- From 1 July 1998, special circumstances will no longer be a criterion for crediting direct payments for up to 100% of child support where both parents intend the payment to be for child support.
- Payments in kind will also be permitted where both parents intended it to be for child support.
The agreed items will provide a degree of certainty for payers making non-agency payments.
They do not preclude situations where both parties intend that a payment or in kind payment was for child support purposes with the removal of the need to demonstrate special circumstances before payment can be credited.
PERSONS EVADING CHILD SUPPORT BY TRAVELLING OVERSEAS
The Child Support Registrar will be given the power to stop a parent who has persistently failed to meet his or her child support liability from leaving Australia through a departure prohibition order (DPO) process.
The DPO will not be time limited and will remain in force until revoked by the Child Support Registrar when the debt has been paid or when satisfactory arrangements have been made.
It targets liable parents in high risk groups those with a history of non-compliance and who have persistently failed to meet their child support obligations.
It supports the concept embodied in the Child Support Scheme that parents are responsible for the financial support of their children.
INTER-DEPARTMENTAL COMMITTEE
An inter-departmental committee will be established, chaired by the Department of Social Security and comprising representatives from the Attorney-Generals, and Child Support Agency, Prime Minister and Cabinet, Finance and Administration, and Treasury.
The Government recognises community concern over the increasing availability of arrangements to minimise taxable income through salary sacrificing and fringe benefits and by the self-employed through, participation in the cash economy or other methods. This can result in inaccurate assessments to either parents income for child support purposes. Consequently, there may be less money for children and increased Government spending where child support liabilities are reduced by such practices.
The Government is also aware that some parents experience difficulties in establishing and maintaining second families, because income from overtime and second jobs is included in the income used for assessing child support liabilities.
The inter-departmental committee will examine the diverse manner in which all forms of income are received, and taken into account for the purpose of child support assessments, so as to ensure that the Scheme operates in a fair and equitable manner for all parties. The inter-departmental committee will take into account the taxation reforms when they are announced.
TRANSPARENCY AND INDEPENDENCE OF PROCESS TO DEPART FROM FORMULA ASSESSMENT
The existing process to depart from formula assessment will be examined to develop a range of options that will improve its transparency and accountability to enable changes to be considered in the 1999/2000 Budget process.
A review of the training, qualifications and remuneration of officers contracted to determine applications to depart from formula assessment will report to the Assistant Treasurer by 30 June 1998.
The current process is perceived as not providing sufficient transparency or accountability. The reviews will focus the concerns with a view to providing substantial improvements to current processes. They will look at a range of options that will address concerns, not alienate parents, and are cost effective to implement.
The examination of the departure process will include legislation, procedures, information needed by clients, physical location and accountability of officers, notification of decisions and appeal mechanisms (including an evaluation of the proposed legislative amendment which introduces objection provisions for departure decisions).
The reviews are preferred to jumping prematurely to a judicial or quasi judicial process which will be costly to administer and run the risk of returning to a system which was largely out of reach of most parents.
Australia moved away from a court-based child support assessment in the 1980s because it often resulted in inconsistent and inadequate decisions.
PILOT STRATEGY TO RESOLVE DISPUTES AROUND CHILD CONTACT ORDERS
A pilot program will assist families in complying with contact orders made by the Family Court. Community organisations will provide information sessions on managing contact arrangements, and immediate assistance if a dispute over contact arrangements arise. The range of services offered may include counselling, mediation, education and in some cases supervised changeover and visiting.
This pilot will be established by 1 December, this year, to cover the Christmas period which is a key time for contact disputes.
In addition, when a parent is found to have breached a contact order, a diversionary program will be available through community organisations. This will provide an alternative to existing penalties and will seek to educate and support these parents with a view to changing behaviour.
Failure to attend would result in the matter reverting to the Court to determine the penalty.