Justine Elliot (Richmond, Australian Labor Party, Assistant Minister for Social Services) Share this | Hansard source

I rise today also to speak in support of the Social Services Legislation Amendment (Child Support Measures) Bill 2023. As we've heard many speakers say, this bill will make the child support scheme better and fairer for Australian families and these improvements are very much needed to make this scheme much more effective and essentially fairer. The child support scheme was introduced by the Hawke government in 1988, and today the Albanese Labor government is continuing that very important legacy. The child support scheme ensures that children receive regular financial support from both parents after a separation. It also assists parents to share the responsibility of both raising their children and providing for their economic security and upbringing. Since the scheme's introduction, more than $33 billion in child support payments have been delivered.

All of us are acutely aware that most parents do absolutely the right thing in providing all of those necessary provisions for their children. We are very much aware of that and want to make that clear. The changes brought forth in this bill, however, ensure that our government can appropriately act in those cases where parents are not acting fairly in terms of making sure there are provisions for their children. That's why the changes in this bill are necessary. In fact, that's why this bill introduces three important key changes. These changes are expected to recover up to $164 million in debt which is rightfully owed to parents and their children. It's absolutely vital that those parents are able to access that in terms of the upbringing of their children. Of course, there are many pressures and lots of financial necessities in raising children, and, when you have cases where they have not been receiving that child support, it makes it much more incredibly difficult.

Firstly, the bill expands the circumstances where Services Australia can deduct child support debts directly from a parent's wages. An employer withholding is an effective and efficient way—probably the most effective way—for the government to collect child support and administer it to parents. The process also ensures that child support is paid on time, allowing parents to meet the everyday financial needs of their children. Making sure it's paid on time at regular intervals will ensure that they have that money to be able to effectively raise their children and provide for their economic security. Currently, Services Australia can only initiate an employer withholding arrangement in active child support cases. That is currently the situation. This bill, put forward today, will allow Services Australia to initiate employer withholding to collect child support debts in any case, including when a case has ended. For example, the child may have turned 18, and therefore the case has ended yet there's still an outstanding debt that is owed; it is still outstanding. This change alone is expected to recover up to $164 million in unpaid child support from around about 18,000 parents, with an average debt of a staggering $11,000 owing to the receiving parent. A change like this will vitally help those single parents around the country. Indeed, $11,000 is such a significant amount to those particular single parents, who indeed have been doing it really tough. This reform will also make the payment process easier and a lot more hassle-free for both parents by preventing debts from building up and causing more problems.

Secondly, this bill will highlight the rules around departure prohibition orders. This will allow the government to stop parents who owe child support from leaving Australia until they actually pay what they owe or agree to a payment plan. Essentially, this measure will stop people from running away overseas, not fulfilling these obligations and not paying their share for their children's financial security and wellbeing. It will also protect the rights of parents who owe child support and are indeed struggling from having those added pressures on them. This reform will stop parents from exploiting a loophole in the current system, and it will allow Services Australia to refuse an exemption when the parent has a history of not paying their child support debt. Whilst this measure is expected to only impact a very small number of parents—around 110—this group is responsible for a very significant debt pool. It is, in fact, a debt pool that sits at an average of $43,500 per parent. This is not fair at all and not okay. It is very unfair to those children and the single parents who are raising their child here. The bill will give the government the power to stop parents from leaving Australia unless they actually pay what they owe or agree to the payment plan. We must all ensure people do not get away with exploiting a system which is designed to support and help their children. Indeed, these changes are in line with what other countries, such as New Zealand, the United Kingdom and the United States, do.

Thirdly, this bill will improve the income accuracy for low-income parents who are not required to lodge a tax return. Child support customers who earn less than the self-support amount of $27,508 and receive an income support payment on each day of the financial year are not required to lodge a tax return. Currently, if low-income parents do not provide income information, Services Australia may apply a default provisional income, which sits at two-thirds of the annual total average weekly earnings for a male, which is currently just over $55,000. However, this is double the self-support amount, so it can significantly overestimate a parent's income. Indeed, an inaccurate estimate can put low-income parents into financial hardship in two ways: it can result in a parent receiving less child support than they should or it can result in a parent being liable to pay more child support than they are able to. Today's bill fixes this problem by deeming a parent's income to be equal to the self-support amount. This will ensure the child support assessment takes into account a much more accurate estimate of the parent's income—a much fairer system. It will also stop parents from hiding or reducing their income on purpose and make sure that child support payments are fair and reasonable. This change alone is expected to benefit up to 150,000 low-income child support parents each year, with receiving parents making up around 70 per cent of this particular group.

The changes in this bill will make a real difference to the lives of single parents and their children. We all know there is more work to do to improve the child support scheme in order to better support families, and this bill is the first step to making the scheme better for parents and children. Indeed, in the government response to the Joint Select Committee on Australia's Family Law System, which was in fact tabled in January 2023, we have committed to implementing a range of recommendations to improve the scheme over the longer term. These include reviewing compliance, with a particular focus on improved collection and enforcement.

We know the majority of people do the right thing, yet the fact is some people deliberately avoid paying child support to inflict financial control and abuse on their former partners. Our government will not stand for that. We also know that, in some circumstances, the child support system has been used as a means of continued financial control and abuse after people have left abusive partners, which results in sustained trauma for victims-survivors—and we know that occurs. Speaking as the Assistant Minister for the Prevention of Family Violence, I am very proud to be working alongside my colleagues sitting here today, and the entire government, with the firm commitment of ending violence in all its forms. We are absolutely committed to that.

In conclusion, in terms of this bill, the Albanese Labor government will ensure that single parents and their children receive the financial support they are entitled to. We as a government will keep working hard to better the lives of Australian families and ensure that the best interests of children are paramount in all that we do. It is for those reasons that we have this bill and these particular changes that are recommended. I commend the bill to the House.

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