Ursula Stephens (NSW, Australian Labor Party, Shadow Parliamentary Secretary to the Leader of the Opposition (Social and Community Affairs)) Share this | Hansard source

This bill is the next legislative stage in the government’s 2006 reforms to the child support system. The Families, Community Services and Indigenous Affairs Legislation Amendment (Child Support Reform Consolidation and Other Measures) Bill 2007 contains a significant number of technical and consequential amendments following from the original two pieces of child support reform legislation considered by the parliament last year. Labor supported these previous child support reform bills in the parliament after expressing our reservations that the government had failed to provide protection for low-income families, who may lose income as a result of the changes to the scheme. Again, we support this legislation, but Labor remain concerned about the protections for low-income families that have to date still not been adequately resolved. This bill also incorporates relevant amendments relocated from the Child Support Legislation Amendment Bill 2004, which Labor was intending to support. We note that the government has now withdrawn that bill from the House Notice Paper.

This amendment bill includes a range of non-child-support changes to various pensions and family payments, including the payment of the baby bonus in instalments for under-18-year-old mothers, and the extension of the pension assets test from 12 to 24 months following the sale of the principal home. Labor welcomes both of these initiatives—not only are they good policy; they were in fact our suggestions in the first place. If this government has completely run out of fresh ideas, Labor will continue to provide them.

The Child Support Scheme was set up in 1988 by the Hawke Labor government and has become an international model and the basis of a similar scheme established in the United Kingdom. Labor acknowledges the genuine concerns about the scheme, including concerns about the fairness of the scheme, the assessment formula and, in particular, compliance. Let me reiterate that Labor acknowledge the need for reform of our child support system. The view we take on the reform challenge, however, is that fundamentally the interests and wellbeing of children must come first and that as far as possible child support policies should serve to support the child in security and in economically acceptable conditions.

The May 2005 report of the Ministerial Taskforce on Child Support, the Parkinson report, was the first systematic evaluation of the child support arrangements. It recommended a new formula for child support assessment based on evidence of the actual costs of raising children, shared parental responsibility for those costs and recognition of each parent’s level of care. The report examined the scheme using sound principles and was generally well received. Labor believes that the report provides a constructive basis for moving forward on child support reform.

Last year this parliament passed two bills which implemented the new Child Support Scheme, including a new payment formula. Whilst not all the recommendations of the Parkinson report were adopted and the new scheme was not entirely to Labor’s satisfaction, we supported those bills. Today’s bill makes further amendments to the new Child Support Scheme.

At last week’s Senate inquiry into this bill the Department of Families, Community Services and Indigenous Affairs, the agency responsible for child support policy, gave evidence that the implementation of the new regime is not progressing as smoothly as expected. The promised stakeholder reference group, for example, has only met once this year. There is also still a lack of detailed information on the impact of the new formula and the new arrangements on families. Ms Jacqueline Taylor from the National Council of Single Mothers and their Children said at the Senate inquiry:

... calculating the financial impact on single mother families post July next year has actually been an incredibly difficult thing to do because there is nothing available to help us with that. There has been no modelling done by the government to actually calculate the impact that these changes will have on sole parent families and we cannot forget that this is also in conjunction with Welfare to Work and the loss of income from that.

The government needs to do more research on the impact of these changes.

Labor believe that there is a responsibility on the government to ensure that the wellbeing of children is not compromised by the combined impact of these policy changes. Labor acknowledge the concerns of many resident parents that they will receive lower child support payments under the new formula. We also note that Professor Parkinson, chair of the ministerial task force, does not disagree that a significant proportion of single parents will receive lower payments as a result of the bill. Last year he gave evidence to a Senate inquiry that around 55 per cent of assessments will decrease under the new formula. At the request of the ministerial task force, NATSEM modelled some of the impact of the new formula. That modelling showed that resident parents on low annual incomes of $26,000 a year or under will incur the biggest reductions in child support payments. For example, where a non-resident parent earns $78,000, a resident parent with an income of $26,000 will be $50 a week worse off. That is a lot of money for a parent earning just $26,000 a year.

More account also needs to be taken of the interaction of the new system with the recent Welfare to Work changes. On the one hand, we have family law and child support law encouraging shared parenting and an acknowledgement that, where there is between 35 per cent and 65 per cent of care, it is considered shared. On the other hand, we have income support policies under the government’s Welfare to Work changes where only one parent can be given principal carer status and we have the important concessions in terms of activity requirements, which can leave the other parent and the children exceptionally vulnerable. Labor is closely monitoring the impact of the intersection of the Welfare to Work laws, the importance of principal carer status and the promotion of shared care under family law to ensure that parents with largely shared caring responsibility are not disadvantaged.

I now turn to some of the other provisions in the bill. First of all, the bill makes some technical changes to the process of administrative and judicial review of decisions in child support cases by the Social Security Appeals Tribunal or by the courts. The Law Council, in its submission to the Senate inquiry into the bill, expressed concerns at the proposed new clause 64 of schedule 1. This provision gives the Social Security Appeals Tribunal the power to make a determination on which documents are relevant to a review of its decision by the court conducting that review. The Law Council is concerned at the appropriateness of this amendment and it believes that it is preferable that the court be entitled to review all documents to determine which are relevant in a decision on the matter before it.

In relation to issues in parenting procedures, the bill contains amendments to clarify situations where a court makes orders for the repayment of child support where payments have been made by a person who is not the parent of the child. Under these provisions a mere suspicion on the part of either parent that the payer is not the parent of the child is a factor that is relevant for the court to consider when making an order on a possible repayment, even when this suspicion or knowledge falls short of a reasonable doubt about parentage.

Schedule 5 deals with changes to the maintenance income test provisions in the A New Tax System (Family Assistance) Act 1999. These amendments will clarify the definitions of ‘amount received’ and ‘amount payable’ in the child support formula. They will also clarify that maintenance income received by a payee for one or more children will reduce the payee’s amount of family tax benefit part A above the base rate, for those children only.

In relation to ongoing collections from contractors, currently, ongoing child support can only be collected from employers if the payer is a wage or salary earner or they receive a Centrelink payment. This amendment will broaden the agency’s power to issue notices requiring the deduction of child support and the forwarding of that deduction to the Child Support Agency to include cases where the payer is under contract for service arrangements that effectively substitute for wages. This change extends the reach of the ongoing collections system to independent contractors, who are effectively employees. Labor supports this change.

Other aspects of the family payment system are also amended by this bill. One significant change is to require the baby bonus to be paid in 13 instalments to parents who are under the age of 18. There is an unfortunate tendency for some to portray young mums in a negative fashion. We certainly do not support this form of reporting. However, there have been noted among some welfare groups and social workers disturbing occurrences of young mothers being abused and exploited over their baby bonus payments. Young women are in a position of special vulnerability when it comes to these issues. Some domestic violence services report that levels of abuse rise sharply around the time the bonus is paid. Women will hand over the money just to get rid of a violent partner. There are far too many stories of young mothers being exploited for the baby bonus money. Government has a responsibility to ensure that its efforts to help families at a critical time are not misused by desperate or selfish people who have kids they neither want nor care for. On this basis, Labor supports the government’s change to fortnightly payments for young mothers.

Labor also supports the common sense change for the maternity payment to be officially known by its commonplace name—the ‘baby bonus’. All family payments will now be conditional upon the registration of the birth. In their submission to the Senate inquiry, the Australian Bureau of Statistics said that the registration requirement would improve the accuracy of Australia’s demographic statistical collections. In oral evidence, the ABS noted that:

Births to mothers in their 30s are more likely to be registered promptly whereas births to younger mothers aged under 24 years were likely to be registered later. It is expected that the proposed requirement to have all births registered before applying for the baby bonus may result in a change in parents’ behaviour.

Labor hopes that the behavioural change will be positive. Given the tendency for late registration amongst those from disadvantaged backgrounds—especially those in the Indigenous community and single mothers—this new requirement must be implemented in such a way that those with particular vulnerabilities are not disadvantaged and do not miss out on any payments that they especially would benefit from.

The other Labor proposal the government is adopting in this bill is an amendment to the Social Security Act and the Veterans’ Entitlements Act to extend the pension assets test exemption period from 12 months to 24 months following the sale of the principal home. Labor proposed an amendment to the Social Security Act in 2006 along similar lines to support pensioners who were unable to have their new home built during the 12-month period due to delays caused by the skills shortage. The 12-month rule was particularly affecting pensioners who were trying to build a new home and being delayed by this government’s skills crisis. Under the current arrangements, a person has 12 months to sell their existing home and construct a new home before the proceeds of the sale of the existing home become an assessable asset. Because of the huge skills shortage, and therefore the delays in building completion dates, a number of pensioners have been unable to get their homes completed within that 12-month time frame. Stories of waiting for trades people to turn up are well known. Labor was concerned about the impact on pensioners of delays that were forcing them to be caught up by the assets test. It now appears that the government is concerned too.

Labor also supports the changes to allow family tax benefits to continue to be paid to members of the Australian Defence Force and members of the Australian Federal Police International Deployment Group who are deployed overseas. Normally, family tax benefit is only payable at the full rate to people who are temporarily overseas for up to 13 weeks. Discretion to extend that period exists where certain prescribed events prevent or delay their return. Presently, ADF and AFP personnel on overseas deployment are not covered adequately by this discretion. The bill makes amendments to rectify this deficiency. Labor supports this lengthy amendment bill; however, we still note our ongoing concerns with the impact of the new child support scheme on low income families.