Ken Ticehurst (Dobell, Liberal Party) Share this | Hansard source

I have been fighting for changes to our child support and family law systems since I first became a member of this parliament, particularly after learning of local men who had committed suicide because of the unfairness of the system. Tony Miller, from Dads in Distress, contacted me in about August 2002 and let me know that there were probably 2,500 men a year committing suicide because they could not access their children. My attention was then drawn to the plight of other fathers out there—and mothers and grandparents—who all suffered needlessly because of the insufficiencies of our system. I formed an informal backbench committee with some colleagues in 2002 to pressure the Prime Minister and cabinet for a formal government committee to address the need for family law reform and an overhaul of our child support system.

Five years on, we are introducing legislation in response to the recent recommendations of the child support task force regarding changes in the way child support is calculated: the Child Support Legislation Amendment (Reform of the Child Support Scheme—Initial Measures) Bill 2006. I cannot emphasise how pleased I am that we have got this far. These changes, once fully implemented, will bring about some equity in the system, possibly making it one of the fairest systems in the world. The proposed child support system is no longer about favouring one parent over another. It also recognises that there is no such thing as a standard family breakdown, nor is there a standard child to raise after the separation. The costs of children vary depending on what type of household you are talking about and the spending patterns of that household. These changes are significant and implementation of the new scheme requires extensive legislative and other changes. We cannot rush it and take the risk of getting it wrong. The new formula will therefore be introduced in July 2008.

This bill introduces some measures in the interim to address some of the major pressure points in the system. Firstly, the bill increases the minimum child support payment to $6.13 a week, or $320 a year, and indexes the payment according to rises in CPI. The minimum is currently not indexed, so it is losing value due to inflation. The minimum payment recognises that all parents with the capacity to do so should contribute to their child’s welfare. The minimum is mostly paid by parents on income support benefits and pensions, which are linked to CPI and other indices, so this minimum payment will remain affordable for all paying parents.

One major criticism of the current child support scheme is that the cap on assessed income is far too high. In 2006 it is $139,347. This leads to very high child support payments that significantly exceed the costs of caring for children in the majority of cases. This measure will reduce the cap by linking it to the average weekly earnings of all employees, rather than to the earnings of full-time workers only. The new cap will be $104,702, which is still quite a substantial sum. This gives a fairer and more realistic maximum amount of child support payable. It is an interim measure until the revised formula is implemented. This is particularly important where both parents are professionals and the custodial parent may even be in small business and in fact does not submit proper tax returns. Where parents will receive less child support as a result, they will still receive a substantial amount. For example, a parent currently receiving about $34,000 a year for two children will still receive more than $24,000 a year.

For the first time, the costs of children will be distributed between the parents according to their capacity to pay. Currently, parents who change their working patterns and earn less income can be assessed to pay the same amount of child support as before the change, on the basis that their former income indicates a higher capacity to earn. This is to protect against parents deliberately reducing their income to avoid child support, which is not fair to their children. However, the rules are sometimes applied to parents who have a good reason for earning less—for example, caring for a new child may mean they cannot do shift work anymore. This is unfair and a major source of concern about the scheme. I have been contacted by non-custodial parents who have been adversely affected by this ruling in the course of my push for a fairer system. Particularly on the Central Coast, where we have a high number of commuters, people who are made redundant from a job in Sydney have no opportunity to gain the same employment on the Central Coast as they previous held.

This measure strikes a fair balance for parents and children. It means that parents who can demonstrate that they have a good reason to reduce their income will not be subject to child support assessments based on their capacity to earn. It also means that parents will not be expected to work overtime, by restricting earning capacity to standard full-time hours for a person’s industry and occupation.

One complaint that paying parents have against the current scheme is that they have no say in how their child support is spent. Measures in this bill mean that nonresident parents will be able to spend a greater percentage of their payments directly on their children. If the parent receiving child support does not agree, a paying parent can still satisfy up to 25 per cent of their child support liability by paying directly for certain essential items, such as school fees and health care, when they pay the rest of the liability in cash. Many paying parents would like this limit to be much higher, but because the parent receiving child support does not have to agree to these payments it is important to find the balance between letting paying parents spend money on their children directly and ensuring that resident parents can meet their day-to-day costs. This measure adjusts this balance by raising the limit on prescribed non-agency payments to 30 per cent of liabilities.

This bill also seeks to reward nonresident parents who have contact with their children. Currently, parents who have the care of their children for at least 30 per cent of the time receive a higher ‘with child’ rate of Newstart and related payments. This is an additional $16.50 a week. To encourage contact between low-income parents and their children, this provision will be broadened to parents who have care of their children for at least one night per week.

This bill will also aim to address issues with some non-custodial parents shirking their responsibilities when it comes to payments. While some parents pay too much child support, others do not pay enough for the support of their children, and this is something we need to fix. The Child Support Agency will increase its existing activities that target serious avoiders and debtors. The Child Support Agency will increase its use of court action to recover outstanding amounts. As well, the number of parents investigated for deliberately understating their income will be increased and action will be taken to ensure that parents lodge proper tax returns.

At the heart of the government’s family law reforms are the new family relationship centres, which aim to help separating families make custody and other arrangements without going to court. These centres will better integrate the Child Support Scheme with the family law system, by helping parents to reach agreement on parenting and child support arrangements. There will also be improvements in the way in which the Child Support Agency does business. A more customer focused approach will include improved training, increased staffing and more intensive case management for difficult cases. The bill also addresses a constitutional issue with the application of the Child Support Scheme to exnuptial children in Western Australia. More specifically, the amendments confirm the validity of the longstanding practice of administering two parallel schemes during periods that fall between amendments to the Commonwealth legislation being enacted and Western Australia adopting those amendments for its exnuptial children.

Everyone knows the child support system needs fixing. This is the first stage in the implementation of the government’s Child Support Scheme, which will promote fairness that has never before existed in our child support system. The current system defies real world experience, and this bill and subsequent bills will overcome that limitation. The new scheme is more focused on the costs and the needs of children, including where care is shared. This is expected to reduce conflict between parents about parenting arrangements, encourage shared parental responsibility and help to ensure that child support is paid in full and on time. It is difficult enough going through the ugly process of divorce, especially for children, without being then subjected to the relentless child support and family law processes. I know these reforms will result in a better outcome for the most important and vulnerable people in our society—that is, our children. I look forward to the full support and implementation of the Child Support Scheme.

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