Kerry Bartlett (Macquarie, Liberal Party) Share this | Hansard source

As a local member, probably the most difficult issues I have had to deal with are those involving family breakdown and child support. They are difficult and distressing for all parties involved: for the resident parent, for the non-resident parent and for the children. On one hand there are women who come into my office whose husbands have deserted them and left them with a number of children and no support, with the husband or the father avoiding his responsibilities and not paying child support payments. On the other hand there are men who come into my office devastated that their wives have left them and have taken their children. They are often cut off from any contact with their children, not even knowing where they are, and denied access to those children, whom they love dearly. At the same time, over a period of time, they are being forced to pay what they consider extremely harsh or excessive amounts of child support for children they cannot see; and sometimes when they do see those children it is obvious they are not benefiting from what the father is paying and the payments they make are seen more as spouse support payments than as child support payments.

And in the middle of all of that are children, traumatised by the separation of their mother and father and by the reduced access to one or the other—usually to the father—and, sadly and tragically, often used as weapons in that struggle between two feuding parents and sometimes seen as a prize, somehow, for the winner in a Family Court case. These are often traumatic, tragic and very distressing circumstances. It is a sad irony, isn’t it, that families that are the fundamental building blocks of our society and on one hand can bring the greatest joy and fulfilment to those involved can, on the other hand, when broken cause the greatest pain to all involved.

The figures are quite sobering. In 2004 there were 52,747 divorces, an increase of 9.2 per cent from 1994, 10 years earlier, and an increase of 22.3 per cent from the figure in 1984, 10 years before that. And 49.8 per cent of divorces in 2004 involved children. In 2003, just over one million children under the age of 17 lived in single parent families. That is, 22 per cent of children lived in single parent families, and most of those—87 per cent—lived with their mothers. In my electorate of Macquarie there are just over 4,000 child support cases, involving 6,146 children. I dare say a whole lot of other children are also living in single parent families but are being supported not through the child support system but by other arrangements.

The family law system, which came into place in its initial iteration in the mid-1970s, and the child support system that has been operating since 1988 have not really adequately assisted families in this situation. In fact, some would argue that rather than assisting they have exacerbated the difficulties. The changes involved in this legislation, along with those changes to family law that we had last year and earlier this year, attempt to reduce the burden and the pain of family breakdown. Clearly we cannot prevent family breakdown; we cannot remove or totally ameliorate the emotional and psychological damage that that causes. But we can try and help partners and children cope. We can try and address the practical and financial issues related to that.

The family law changes that came into place earlier, for instance, involved a commitment by this government of just on $400 million for the establishment of family relationship centres. Earlier this year I was pleased that the Attorney-General visited Penrith, just near my electorate, to open the family relationship centre at Penrith, which aims to serve the areas of Penrith, the Nepean, the Hawkesbury and the Blue Mountains and is already providing an incredibly valuable resource for parents. This includes parents struggling to hold their relationships together and, hopefully, in some cases, it is saving marriages by providing that essential support and counselling. It is also helping separated partners to cope with life after separation.

This legislation currently before the House, the Child Support Legislation Amendment (Reform of the Child Support Scheme—New Formula and Other Measures) Bill 2006, involves the second aspect of those changes to try and reduce the pressure and to try to provide support for families wracked by breakdown. These are changes to the child support system to allow the partners to better cope with the financial and practical aspects of separation.

Most of the aspects of this legislation come out of the recommendations of the House of Representatives Standing Committee on Family and Community Affairs that some years ago produced that excellent report Every picture tells a story. After intense consultations and hearings around the country, it made a list of excellent recommendations about how to try and address these issues. Then of course the government set up the ministerial task force headed by Professor Patrick Parkinson, who did extensive research into how best to apply the recommendations of the House of Representatives committee.

We have in this legislation today a number of key changes aimed at reducing some of the trauma, particularly the financial trauma, associated with family breakdown. Probably the first and most significant one involves the changes to the child support formula. Fundamentally and importantly, those changes involve basing the formula on the cost of raising children as ascertained by independent and extensive research, rather than basing it on an arbitrary percentage of the payer’s income, which was the way the old formula worked.

The new formula, as well as being based on the cost of raising children, will take into account both parents’ incomes. The resident and the non-resident parent’s incomes will be treated in the same way. That is much fairer than the old system, where the excluded income amount was treated differently for the payer and the payee, or the resident and the non-resident parent. The new formula will better allow for the amount of time that each parent spends with their children and the costs involved in that.

The formula will treat first and second families more equitably, and this is a very important step. Under the old formula, second families really suffered. Where a family had, sadly, broken down and the payer, usually the father, was trying to undertake his obligations and responsibilities to look after his natural children from the first family, the first marriage, he really struggled when he entered a new relationship and tried to establish a second family. This formula very fairly tries to much better balance the costs and the needs of the second family with that of the first family. The formula also recognises that children cost more as they get older. The cost of raising a teenager, as all the parents in this place will know, is substantially more than the cost of looking after infant children.

In all, this new formula is fairer, more objectively based and will more equitably deal with the issues involved. Clearly not every payee will receive more money out of this formula. It is axiomatic that, if there were problems with the way the old formula worked—both sides agree that there were issues with that and the formula has to change—some people will be better off and some will be worse off. It is disappointing in that context to hear some of the speakers from the opposition somehow arguing that no-one ought to be worse off. If there is an acknowledgement that the formula was faulty in the first place and that faulty formula is to be changed then, unless taxpayers are going to be asked to dig into their pockets, some people will be receiving less in child support payments than before, and that is understandable. The important point is that the new formula is based on the extensive work done by the House of Representatives committee, including members of the opposition, and on the extensive, quality work done by Professor Patrick Parkinson.

Some other aspects of this legislation are also very welcome and very valuable. The external review of the Child Support Agency decisions to give an external or objective avenue of appeal is a welcome change. One of the extremely frustrating aspects of the process for many people who have had to deal with the Child Support Agency over the years has been that, if they want to object to the way the formula is calculated and the way it works, they have to go through an appeal process using Child Support Agency staff. They, again, try to do their job correctly and do the right thing, but nevertheless they look at the situations through pretty much the same eyes as the staff who made the first decisions. This legislation will provide an external appeals process through the Social Security Appeals Tribunal from 1 January next year and will bring a much greater degree of objectivity into that appeal process. That will be welcomed by parents who have experienced the frustration time and time again of not being able to get a fair hearing through the Child Support Agency.

The third measure in this legislation provides for better arrangements for parents making their own agreements between themselves. They will be better able to formalise those agreements without having to go through the Child Support Agency and will be able to formalise them in a way that gives greater certainty not only to the payee but also to the payer and ultimately, of course, to the children.

Fourthly, there is a better alignment between child support payments, the family tax benefit system and childcare payments. For example, parents with over 65 per cent access to their children will keep all of the family tax benefit that accrues for their children instead of losing some of it. Low-income non-resident parents who spend more than 14 per cent of contact time with their children will receive rent assistance, the healthcare card and the Medicare safety net.

It is important to point out here that there will be substantial costs to the government, several hundred million dollars, over the next four years as part of this. This is not a revenue-saving device for the government. We are putting extra money into this to make sure that families are not disadvantaged, and a substantial amount at that.

Another change is the three-year exclusion of the second income of a payer who is trying to set up a new home. When a family breaks down, the payer often leaves the family home so that the mother—usually—and the children still have a place where they can live. The payer leaves and often has to pay rent for a new home while trying to support his children, often in very difficult circumstances. We made a change some years ago so that a payer who took on a second job or did overtime to support a second family would have the income from that second job or the overtime excluded from the formula, and that was a very welcome step. This legislation goes a step further to recognise not only the cost of supporting a second family but also indeed the cost of setting up a new home. For the first three years, a payer who does take on a second job to try and support himself and to establish a home will have the income from that second job excluded from the formula—a very sensible and equitable approach.

Another change is the better inclusion of the costs of supporting stepchildren in assessing the way that the child support formula works. Stepchildren, if there is no other support for them, will be treated, quite appropriately, in the same way as the natural or biological children of the parent. As well, there will be the introduction of an increased minimum payment where a payer is not working and is still supporting children. Where he is supporting children in more than one family, instead of that minimum payment being split between the two families—or indeed in some cases even three families—that minimum payment will apply to each family. This is quite a reasonable arrangement. Another initiative is that where payers are deliberately minimising their incomes that minimum payment will be raised to $20 a week so that they cannot get out of their obligations to their children.

These are very substantial changes, and are well overdue and very welcome improvements to the way that the child support formula and system works. When added to the family law changes that we saw earlier, these constitute a very significant improvement for families suffering the trauma and distress of family breakdown. We will never stop families breaking down, we will never remove the trauma associated with that, but these changes will provide very positive steps in the right direction in helping partners and in helping children particularly cope with the financial and practical aspects of those family breakdowns.

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