After sending this petition through to a number of MP's and Senators, I have received the following response from the Department of Social Services and will be responding when time permits (unfortunately, I was unable to upload the PDF letter):
Dear Ms Richards
Thank you for your email of 10 March 2023 to the Minister for the National Disability Insurance Scheme and Minister for Government Services, the Hon Bill Shorten MP, regarding child support. Your email was referred to the Minister for Social Services, the Hon Amanda Rishworth MP, as this matter falls within her portfolio responsibilities. I have been asked to reply on behalf of the Minister.
In your email, you raised several issues and made a number of recommendations regarding the Child Support scheme. I would like to assure you the Australian Government is aware of the difficulties faced by parents after separation, including the stress of disputes about child support.
The Government is also deeply concerned about the current cost of living crisis being experienced by Australians. On 28 September 2022, the Senate established the Select Committee on the Cost of Living to inquire into and report on:
� the cost of living pressures facing Australians,
� the Government’s fiscal policy response to the cost of living,
� ways to ease cost of living pressures through the tax and transfer system,
� measures to ease the cost of living through the provision of Government services, and
� any other related matter.
The submission closing date for the select committee is 12 May 2023, and the Select Committee are expected to report by 30 November 2023. More information is available at www.aph.gov.au/Parliamentary_Business/Committees/Senate/Cost_of_Living/costofliving
You may also be interested to know that the 2019 Joint Select Committee on Australia’s Family Law System (Joint Select Committee) conducted a wide-ranging inquiry to ensure that the family law system operates as fairly and efficiently as possible. This Committee also made 19 child support recommendations. For more information on the Family Law Inquiry, please visit www.aph.gov.au/Parliamentary_Business/Committees/Joint/Family_Law_System
The Government’s response to the Committee’s recommendations was tabled on 25 January 2023. The report can be found at www.ag.gov.au/families-and-marriage/publications/australian-government-response-inquiry-joint-select-committee-australias-family-law-system
I note the Attorney-General, the Hon Mark Dreyfus KC MP, has also introduced the Family Law Amendment Bill 2023 which can be found at www.aph.gov.au The Government wants to make sure the best interests of children are prioritised and placed at the centre of the family law system, and the Bill seeks to improve the family law system so that it is accessible, safer, simpler to use and delivers fairness and justice for all Australian families. The Bill includes a number of changes, including strengthening compliance with, and enforcement of, parenting orders.
Suicide and family and domestic violence
The Government shares your concerns about the risks of suicide and the harmful effects of family and domestic violence. The Government acknowledges the causes of suicide are complex, and that reducing the number of lives lost requires the combined efforts of all governments and communities to address individual, social and economic drivers of distress.
The National Suicide Prevention Office is coordinating a whole-of-government response and developing a National Suicide Prevention Strategy which will address the social determinants of suicide, with a focus on communities who are disproportionately impacted by these issues.
Domestic and family violence in our community is unacceptable, and everyone, regardless of gender, has the right to live free from harm and without fear of violence or abuse. As you know, services such as MensLine Australia (1300 789 978, www.mensline.org.au and the Men’s Referral Service and Brief Intervention Service (1300 766 491) provide support services for men with family and relationship concerns, including men experiencing domestic violence.
In addition, the Government funds 1800RESPECT, Australia’s national telephone and online counselling and support service for people affected by domestic, family and sexual violence. It provides free counselling and support, 24 hours a day, seven days a week.
Parental alienation and disputed care
You expressed concern the Child Support scheme is used to perpetrate child abuse and parental alienation by parents for financial gain. While the Government encourages involvement of both parents in their children’s lives, the Child Support scheme does not play any role in establishing or enforcing care arrangements for children. Services Australia does not have the authority to compel parents to adhere to previously agreed or court-ordered care arrangements and these issues are best dealt with through mediation or dispute resolution, or pursued through the family law system.
Although the Child Support scheme is not responsible for the enforcement of court orders or parenting agreements, child support legislation contains interim care provisions which enable the care recorded in a child support assessment to reflect a court order (or other written agreement) even where the actual care is not occurring in line with that arrangement. The interim care policy balances the need to ensure children are financially supported, with that of the other parent seeking to have their parenting order or other written agreement complied with. More information about interim care determinations is available in topic 2.2.4 of the Child Support Guide at www.guides.dss.gov.au/child-support-guide
The Government acknowledged the concerns raised by the Committee in relation to the interaction between the care of a child and the financial impact on a child support assessment. The Government also recognises the complexity in balancing the need for the Child Support scheme to meet its intended purpose to ensure children from separated families receive adequate financial support, with the objectives of the family law system to help people resolve the legal aspects of family separation, including disputes about parenting arrangements for children.
In response to recommendation 17 of the Joint Select Committee’s third interim report, the Government agreed to review the interim care provisions to identify opportunities for reform.
Misleading statements
You expressed concern there are no repercussions for parents who make false and misleading statements about their care arrangements. If Services Australia becomes aware of a false or misleading statement, or where an allegation of fraud is made, an investigation is conducted to determine if the case should be referred for prosecution. If a person is found guilty of an offence under any of these provisions, they may be subject to a penalty, such as a fine or imprisonment.
Child support law and the Privacy Act 1988 prohibit Services Australia from revealing any information about its investigations, however this does not mean action is not being taken.
Income-related issues
You recommend child support assessments should be based on a parent’s net income rather than gross pay. I acknowledge your concern that if parents earn additional income, such as overtime, it is included for child support purposes.
The Child Support scheme exists to ensure children are supported by their parents according to their financial capacity. Child support assessments are generally based on both parents’ adjusted taxable income for the last relevant financial year because this is the most up-to-date and accurate income information available to Services Australia. Parents are not expected to pay child support on income that is subject to taxation. The child support liability generated by the child support Costs of the Children Table is based on costs of children research which identified the expenditure patterns of families with children at different levels of income. These patterns are derived from parents making expenditure decisions based on their post-tax income.
You may be interested to know that child support legislation allows for the exclusion of additional income for a period of three years from separation to assist either parent with their re-establishment costs. This applies to parents who can show their additional income is earned to meet the costs of re-establishment. Parents may earn this additional income from a variety of sources, such as overtime, taking on a second job, investment income or a career change to a higher paying job. This provision is subject to a three-year time limit because parents will generally achieve greater stability in their arrangements the longer they have been separated.
The Government appreciates that parents face difficult choices in balancing their responsibility to care for their children with the need to work to improve their family’s financial situation.
Families have diverse parenting arrangements and responsibilities and the Government supports these choices as far as possible through the family assistance program, childcare programs and the Paid Parental Leave scheme. The Government understands that the work decisions one parent makes can affect how much child support the other parent may pay or receive.
The policy settings for social security and family assistance payments support the Government’s broader workforce participation agenda as well as supporting the policy position that parents should be encouraged to enter the workforce, or increase their hours as their children get older.
Although the Government cannot force parents to make certain decisions about their lifestyle or employment, Services Australia can change an assessment based on the earning capacity of either parent. In order to establish that a parent has a greater capacity to earn income, Services Australia must be satisfied the parent is not working despite ample opportunity to do so, and their decision is not justified by either their caring responsibilities or state of health.
Services Australia must also consider whether the parent has reduced their earnings with an intention to vary the level of child support to their own advantage.
Male Total Average Weekly Earnings (MTAWE)
As I noted previously, the Child Support scheme is based on the principle that children are entitled to share in the financial resources of both parents. For this reason, the child support formula applies an income shares methodology, and MTAWE is used to calculate the self-support amount and underpins the income structure of the Costs of the Children Table which determines the costs of the children for an assessment. MTAWE is used for consistency with other Government payments and programs.
In response to Recommendations 14, 18 and 19 of the Committee’s third interim report, the Government has agreed to establish a Child Support Expert Panel, and commission research into the costs of raising children in Australia. The Expert Panel will review the costs of children findings to make recommendations on whether and how to update the Costs of the Children Table (and formula).
Recognition of daytime care
Child support assessments are generally based on the number of nights a parent cares for a child, however, for some families this does not accurately reflect the child’s care arrangement. For example, one parent may provide care every night while the other parent provides care during the day.
Services Australia can determine a pattern of care based on the number of hours of care to calculate each parent’s care percentage. Services Australia can consider the amount of time that each parent cares for the child during both day and night, as well as who is responsible for making arrangements for, and decisions about, the child’s welfare. You can find more information on how care other than in nights may be used in topic 2.2.1 of the Child Support Guide at www.guides.dss.gov.au/child-support-guide
Paying child support with equal shared care
You recommend that when separated parents have two children, and each parent has sole care of one child, child support should not be payable. As you would be aware, the child support formula determines how much child support is payable by calculating each parent’s child support percentage. A parent’s child support percentage represents the share of the costs of each of the children they are required to meet, based on their share of combined income, and less their contribution to the costs of the children through care. If a parent’s child support percentage is greater than zero, they will be liable to pay child support.
If the incomes of each parent is different, one parent may be required to pay child support. The child support formula is designed in this way to ensure that children are supported by both parents in accordance with their financial capacity (i.e. the formula does not quarantine part of one parent’s income from being assessed because there is overall, an equal shared care arrangement).
Reconciling child support payments
As you know, the costs of the children as calculated within a child support assessment can be met by each parent through either care and/or the payment of child support. Services Australia does not request either parent verify their compliance with their child support obligation by reporting their household’s child-related expenditure (as met through care or payments received).
Expenditure on children can include household costs such as housing, energy bills and transport, and direct costs of children such as food, clothing and public education. I note that parents will make expenditure decisions based on their own personal financial income from their own salaries, wages, or government assistance. These decisions are not an indicator that child support received is not being used responsibly to meet the costs of raising their child(ren).
The Government is strongly committed to supporting families with children and provides a range of family assistance and income support payments to assist families with the pressures on their household budgets. Recipients of these payments are also not required to reconcile how the financial assistance they may receive from the Government is spent for the same reasons noted above.
Family Tax Benefit
The child support formula understands that parents may receive both child support payments and Family Tax Benefit. In calculating the costs of the children for an assessment, the Costs of the Children Table reduces the costs of the children to be met through child support payments, by the average amount of Family Tax Benefit Part A a parent who is subject to the maintenance income test receives. This means a paying parent pays less child support because the receiving parent’s potential eligibility for Family Tax Benefit Part A is considered.
Change of Assessment
Several of the issues you have raised and the amendments you have proposed, can be addressed through the change of assessment process. If a parent believes their child support assessment is unfair, they can seek a review under the change of assessment process which allows Services Australia to consider the broader financial circumstances of both parents to determine an appropriate amount of child support payable.
For example, Reason 4 of the change of assessment process allows the income of a child to be taken into account in a child support assessment. You can find more information in topic 2.6.10 of the Child Support Guide at www.guides.dss.gov.au/child-support-guide
You may wish to contact Services Australia on 13 1272 if you require any further information about your child support assessment.
I appreciate the concerns that you have raised and I have noted your suggestions. The Government continues to monitor the effect of the Child Support scheme, and your comments will be considered in future policy reviews of these arrangements.
Thank you again for writing.
Yours sincerely
Agnieszka Nelson
Branch Manager
Families and Payment Support Branch
5 April 2023