Michael Sukkar (Deakin, Liberal Party, Shadow Minister for Social Services) Share this | Link to this | Hansard source

The coalition will be supporting the Social Services Legislation Amendment (Child Support Measures) Bill 2023. This bill works to improve debt recovery and help prevent future debts for low-income parents. It therefore will have the coalition's support. In fact, two of the measures in the bill are measures that were previously announced by the former coalition government as part of the 2021-22 Mid-Year Economic and Fiscal Outlook that were not legislated prior to the last federal election. These coalition measures strengthen Australia's child support framework, and it is pleasing to see the current government recognise the hard work of the former minister in this area by legislating these very important reforms.

The former coalition government committed $7.8 million to strengthening child support compliance activities, enabling child support debts to be recovered in a wider range of circumstances. This included allowing Services Australia to dock parents' pay to repay child support in more circumstances, including after a child turns 18, which overturns the existing loophole where it is effectively case closed once a child turns 18. At that point, there are limited ways to recover a debt.

The former coalition government also worked to strengthen the departure prohibition order system, which prevents parents who fail to pay child support from leaving Australia. This is another measure within the bill before us today. The coalition government again worked to give Services Australia discretion in those circumstances to refuse an exemption if they have reason to believe the parent is likely to shirk their responsibilities and fail to pay back the remainder of the debt when they return to Australia. Under the coalition, since July 2017 5,394 parents were issued with a travel ban, enabling the recovery of nearly $100 million and ensuring to a greater extent the wellbeing and economic security of those children who were affected by the relevant family breakdown. It's expected that these changes will recover up to $164 million in debt owed to parents and their children.

We understand that family breakdowns are incredibly difficult, so child support is in place to ensure that, no matter where or with whom they live, children that are affected by family breakdown remain to the greatest extent financially secure. We make no apologies for employing and indeed putting on the table these tough measures to ensure that child support is paid, because, again, parents who shirk their responsibilities are just depriving their own children of the financial support that will ultimately give them a better life. We recognise that most parents do the right thing and fulfil their child support obligations. Since its introduction in 1988, the government has transferred a remarkable $33 billion in child support payments. When parents don't pay their child support on time, we all know in this place that it has a real and material impact on the financial security of single parents and their children. These measures will therefore go some way to closing loopholes and providing Services Australia with additional capabilities to stop those seeking to shirk their responsibility and ultimately to provide for their children—to provide the support that they deserve and need. The coalition remains committed, just as we were when in government, to seeing parents and children receive the financial support they're entitled to. For that reason, we'll commend the government and commend and support this bill in this chamber and in the other place.

Kate Thwaites (Jagajaga, Australian Labor Party) Share this | Link to this | Hansard source

This bill, the Social Services Legislation Amendment (Child Support Measures) Bill 2023, has the potential to make a really significant difference in the lives of children and families in all of our communities. It is positive to hear that those opposite support the bill, because I'm sure that many in this chamber have constituents who have come to them over the years frustrated and upset with the child support system, asking for our support for a way through. The truth is that we haven't seen a lot of reform in this area, so this reform is a positive step and a step in the right direction, and our government has signalled that there is more to come. We do know that every child support case is different. Everyone has a different set of circumstances. Of course, some people who pay or receive child support do so without encountering any issues. It is a really important system, set up to ensure the best interests of and the best futures for children.

But it's those occasions when we know that the system hasn't worked or isn't working that tell us that we need to look at how we can make things better. When we heard the stories of parents who've suffered financial abuse, including through missing or misrepresented levels of child support payments, our government knew we had to make changes. Those of us in this place who have the opportunity to make these changes to improve the way these systems, which are so important in people's lives, work owe it to the people in our community, to their kids and in fact also to the people who administer these systems—all those people working at Services Australia—to help make the child support system in this country work as well as it can. I'm well aware that often there are not easy fixes for some of the issues encountered in this space, but it is really heartening to know that we have a minister and a government that aren't shying away from changes to the child support system that will help deliver fairer outcomes for separated families. This is important work.

This bill will help improve the timely collection of child support owed to parents and help prevent future debt for low-income parents. We know child support is a big system. In the last financial year alone, $3.7 billion in child support payments was transferred between 1.3 million parents for 1.1 million children in Australia. In this bill, our government are proposing three key changes. We are expanding employer withholding, tightening the arrangements around departure prohibition orders and improving income accuracy for low-income parents. These represent the start of reforms of child support in this country that our government will deliver. As I've said, child support is a complex system; it has a lot of variability in it and, of course, people have variability in their circumstances. No one model is ever going to fit every family and their circumstances. So we can't promise that the changes being introduced will sort every issue or will make the change that every single family is looking for, but we do know this will make an important difference for many families.

I, like many in this chamber, I'm sure, have had people in my community contact my office with a range of issues relating to child support. There are certainly some consistent themes that I can draw out from the contact. They include confusion about the way the system works, the structure of child support and the assistance that can be provided under that system. People have also pointed out to me the difficulty they find in getting the help they need when payments aren't coming through as expected. Consistency of payments is another concern, and I'm really pleased to see that one of the features of the bill we're debating today will help see child support paid on time, providing that certainty that we all know is so important in our lives and affects what budget a parent has to work with in any given week.

We know there's more to be done beyond the changes being introduced in this bill. Our government is very much aware of the scale of the task to make the child support system work better. We know that many people who pay or receive child support do the right thing. As I said, in many cases the system works as it should. But, for the people it unfortunately doesn't work for, we need to make sure there are strict measures in place so that, wherever possible, parents and kids are getting the child support they're owed.

We know for a fact that some parents deliberately avoid paying child support or deliberately misrepresent their earnings to avoid paying as much child support as they should. In many cases this kind of behaviour can be a form of financial control and abuse. It can be used against former partners and ultimately, of course, leaves children and the parents caring for them worse off, sometimes with some quite significant repercussions. From conversations I've had with some parents—and again I'm sure others have also had these conversations—I know it is particularly difficult for those who have left abusive partners and now find they're experiencing continued trauma as a result of child support being withheld. I do note the important work of the family law inquiry that was conducted in the 46th Parliament and brought renewed focus to these kinds of issues, as well as other relevant parliamentary inquiries that have highlighted how interwoven some of these issues are, including the family, domestic and sexual violence inquiry I was a member of in the previous parliament. We do know financial security is a serious problem in these areas and it disproportionally affects women.

At the beginning of this year our government outlined in its response to the family law inquiry the work we'll be doing this year and beyond to improve the operations of the child support system in our country. We are strongly committed to seeing single parents and the children they are raising receive the financial support they are entitled to. That's what this system should do. We are mindful of making sure that Services Australia and other government services don't inadvertently make financial abuse or other forms of abuse worse, and we're reviewing compliance, collection and enforcement. That is in no way a reflection on the people who do this work. It is difficult work, and they do it well. What we're looking at are the structures and rules that support them to do this work.

This year the government will establish a child support consultation group, a group providing important input on issues being faced by parents and families, as well as a child support expert panel, which will consider the child support formula and whether it can more accurately represent the costs parents face today in raising kids. We will also support an evaluation of separated families to see what more should be done to support parents in situations where private collection arrangements have broken down, and we'll commission research looking at the costs facing separated parents. All of this will help us continue to reform this very important system.

In this bill there are, as I said, a number of significant changes. The first change in this bill is extending employer withholding, which is the default method of paying child support and is an effective way to collect support. Last financial year, employer withholding enabled the collection of $743 million in child support from 91,000 parents. The changes we're introducing in this bill will improve the active collection of child support debt in cases which have ended by extending the circumstances where Services Australia can deduct child support from a parent's wages. It will help to ensure that child support is paid on time, giving parents the financial resources they need to meet the week-to-week costs that come with raising their kids. Currently, employer withholding can only be initiated in active child support cases, cases where there is an ongoing obligation for child support. The bill before us fixes that. It enables Services Australia to use employer withholding to collect child support debts in any case, including those where the case has ended.

An example of this might be where a case has been active and then, of course, a child turns 18 and the case ends. That scenario sounds reasonable, but, in fact, it means that in some cases the receiving parent is still owed a debt by the other parent, but they can't take any action, because there isn't an active child support case. What we have here is a sensible proposition that, even if the case has ended, there's still the debt and it should be paid. We estimate this will recover up to $154 million owed in unpaid child support from a pool of around 18,000 parents. With an average debt of nearly $11,000 owing to the receiving parent we can see how this will make a big difference to families' lives.

The second change is tightening departure prohibition orders targeted at parents who deliberately and repeatedly avoid their child support obligations. Parents with a departure prohibition order will no longer be able to offer a refundable financial security like a bond to qualify for exemption, unless Services Australia is satisfied that they will make satisfactory arrangements to repay their child support debt within an appropriate period. This makes these rules clearer across families. It means if a parent returns to Australia they get that bond back, regardless of whether they repay the child support debt they're meant to. Under the current system, if the parent owing child support is someone of reasonably good financial means and can provide a bond, they can travel overseas while continuing to actively avoid their legal obligations to pay that child support, meaning that those children miss out. In this case, we are closing down a loophole that should be shut down. Parents who owe child support shouldn't be able to exploit a pathway like this to avoid paying up. The changes will enable Services Australia to refuse an exemption to allow overseas travel even if someone has a bond or other form of financial security to offer. On this measure, the data tells us there is a smaller number of families involved—about 110 parents are in this situation—but it's worth highlighting this small group of parents each have quite a substantial debt pool, averaging $43,500 each.

The third change is on improving income accuracy for around 150,000 low-income parents. This will help prevent debts in circumstances where low-income parents on income support are not required to lodge a tax return. The change will allow Services Australia to deem the parent's adjustable taxable income to be equal to the self-support amount. We sometimes see at the moment inaccurate income estimates putting parents on lower incomes into a tough position financially—and these are people who are already in a tough position. It can result in a parent receiving less child support than they should or in fact being liable to pay more child support than they are able to. From 1 July this year, subject to the passage of this legislation, a parent who lodges a 'return not necessary' form and does not provide income information to Services Australia will have a provisional income created for them by Services Australia that is equal to their self-support amount, and that's the amount of money the parent receiving the child support needs to ensure they can get by with their own living expenses. This will be an important improvement on the current situation, where Services Australia may be applying a provisional income figure to the parent being assessed that is significantly higher than the actual figure. Again, we know this will make a real difference to families who rely on this system and who want it to be as accurate as possible. It will bolster our existing efforts to ensure that child support information is accurate, and it reflects the up-to-date earnings data of families.

Child support is too important a system to leave as it is at the moment. As I've said, it is a system that, for many families, works in a reasonable way, and many families are satisfied with the measures and the way the system currently works for them. But there are certainly many families who have difficulties with this system, and we know that in many cases it is women who are suffering as a result of some of the problems that remain in the system. We know that there are opportunities for the system to be used to further financial abuse in relationships where there has been abuse. We know that sometimes the system is not operating as it should to give children the support they should have through life. For all those reasons, this is an important bill. It is an important first step in the commitments our government has made to make this a better system for Australian families, to understand how the system should work in their interest. We recognise the need to reform the system for the sake of parents and children. Parents and children deserve a system that is fit for purpose and effective. We know there is much more work to do, and I look forward to working with the minister, colleagues and other members of the parliament—to doing that work and to continuing to talk with members of my community, who, I know, have a personal interest in this and an understanding of some of the difficulties it can place people in.

To all those people in my community—I have seen quite a few of them recently—I say: this bill is a statement of our faith as a government. We are intending to make this a system that works better for Australian families. This is the first step, and there is more to come.

Libby Coker (Corangamite, Australian Labor Party) Share this | Link to this | Hansard source

Labor has a proud history of improving the lives of Australian children and their families. It was a Labor government that introduced paid parental leave. It was a Labor government that launched the first National Plan to Reduce Violence against Women and their Children. And it was a Labor government that legislated child support in 1988. Today we introduce the next stage of child support measures, to ensure that all children are given the financial support they deserve. Under the Social Services Legislation Amendment (Child Support Measures) Bill 2023, loopholes will be closed and more than $160 million of unpaid child support will be recovered and returned to single parents and their children who need it. What we know is that right now there are 18,000 parents who are not paying child support. This means, on average, that 18,000 children are missing out on $11,000 which they are each entitled to receive. This $11,000 could be for schoolbooks, new school shoes, the school excursion or to help put food on the table and pay the bills.

As a former teacher in outer Melbourne and Geelong, I know just how challenging it can be for single parents and their children. Child support matters. I saw firsthand how teachers go above and beyond for their students by making sure they have eaten breakfast, have extra help with their homework and return home safely at the end of the day. I continue to hear the stories across my electorate of Corangamite. Breakfast clubs in schools like Leopold Primary School play such an important role in making sure children are looked after. But help like this can only go so far. It's time to fix a system that has not effectively enforced the payment of much-needed child support. This will be non-negotiable under this bill. The Albanese government is determined to help single parents raise their children to the best of their ability, without the anxiety that comes with financial stress. No parent should be forced to choose between paying for petrol for the school pick-up and paying the heating bill.

I'm proud that our government has always been at the forefront of this reform. Just yesterday, our government announced $1.9 billion over five years to extend parenting payments to those with children up to 14 years of age. Around 110,000 children will benefit from this scheme, with parents to take home more than $176 extra per fortnight through this Albanese government initiative. It's another milestone in Labor's history, which at its core is all about improving the lives of family and children. Such reforms remind me of the time when the Hawke government stepped in and introduced the groundbreaking child support scheme to ensure that children affected by family breakdown received adequate and fair financial security. The Albanese government is committed to continuing this work.

Quite simply, the median income of parents who receive child support is not enough. It sits at around $33,000 annually, which is less than half of national average earnings. Our government recognises the financial stress facing many single-parent families, and that's why, in conjunction with this bill, we're introducing cheaper child care and a number of other measures in tonight's budget to help parents get back to work, earn more and pay their bills.

This bill supports reform and ensures that other parents contribute to child support cases. I know that most of these other parents try to do the right thing under the scheme. The data shows that over $33 billion in support payments have been made since the scheme's introduction in 1988. Despite this, child support debt is way too high. From 1 July, the bill will make it easier for Services Australia to collect child support debts, and it will help prevent further debts for low-income families by delivering three key changes.

Firstly, it will strengthen Services Australia's powers to collect debts from parents who have not paid their child support. To do this, the bill will expand the circumstances where debts can be deducted directly from a parent's wage. For example, when a child turns 18 and the case for child support has ended, Services Australia can retrieve any outstanding child support debt. At a time where financial stress is incredibly high for many young people, this reform will make sure they have the financial security to, say, move out of home or pursue a career.

Secondly, it will stop those parents—who are in the minority—who owe child support and exploit the loopholes of the scheme. One such loophole relates to travel bonds. Currently, by providing a bond, parents can get an exemption from payments if they go overseas. The problem is that, once they return, Services Australia can't keep that bond to contribute towards any unpaid support debts. This is not what the scheme is for, and it's not what we want for our nation's children and single-parent families. This bill will make sure that Services Australia can keep that bond and refuse an exemption for parents who have the means to pay support but choose not to. Not many parents cheat the system in this way, but those who do owe on average more than $43,000 each in child support.

Finally, we are addressing the limitations of parental income assessments. Many parents who receive payments make less than $28,000 each year, which means they don't have to lodge a tax return. Without that critical information, Services Australia have to apply a default income assessment for the parent, which in many cases is a wild overestimation of their earnings. This means the guardian parent ends up in a position where they don't receive enough child support. On the flip side, it can also mean the other parent must pay more than they are able to afford. This bill addresses this problem for more than 150,000 parents. This reform will make sure children are better supported by ensuring that parental income assessments better reflect accurate earnings information: parents can advise Services Australia of their actual income at any time, and Services Australia can access information from the Australian Taxation Office.

All in all, with this bill, we take the next step towards a better and fairer child support system. We know it will make a substantial difference to the lives of so many families in my electorate, who come to me and talk about this issue. We have listened and we, the Albanese government, are acting. We also recognise that there is more work to do when it comes to improving child support. That's why our government has committed to this bill and to implementing the recommendations of the report from the Joint Select Committee on Australia's Family Law System.

Like the Hawke government before us, our government wants to see child support paid in full and on time to make sure that parents have the financial resources they need to meet the costs of supporting a child on an everyday basis. We want to secure a better future for our nation's children; we want to take pressure off parents; we want to make sure we take the burden off teachers, friends and family; and, most importantly, we want this generation of children to look back on these years and know that they were looked after and given every opportunity to reach their potential.

Debate adjourned.