Introduction
10.1
This chapter discusses the interaction between Australia's Child Support Scheme (the scheme) and the family law system. The scheme facilitates the assessment, collection and transfer of child support payments between separated parents to ensure that children are adequately financially supported.
10.2
A number of issues about the scheme were raised in submissions to the inquiry, relating to the administration of the scheme; the collection and recovery of child support payments; interactions with the family law system; and the potential for child support to be a contributing factor to ongoing conflict between separated parents.
10.3
This chapter uses the term 'parent' broadly to include any person who provides ongoing care for a child—such as a legal guardian, grandparent or other family member.
Background
10.4
The Child Support (Assessment) Act 1989 (CSA Act), the Child Support (Registration and Collection) Act 1988 (CSRC Act) and their subsequent regulations provide the legislative framework for the scheme. The legislation delegates decision-making powers to the Child Support Registrar (Registrar) and aims to administer child support outside of the family courts where possible.
10.5
Aspects of child support are also covered by the Family Law Act 1975 (Family Law Act). The main function of the Family Law Act in terms of child support is to empower family courts to make provisions for child maintenance when a child support assessment cannot be conducted administratively. The Family Law Act also requires family courts to consider child support when making property settlement orders and spousal maintenance orders.
10.6
Since the scheme was first introduced, the Australian Government has consistently been of the view that assessments for child support should be facilitated by an administrative agency to relieve pressure from the courts, and so parents are not 'faced with the costs, delays and emotional stress of court proceedings' in the first instance.
10.7
While the legislation is administered by the Department of Social Services (DSS), the scheme itself is delivered by Services Australia, which manages applications for child support assessments and facilitates the collection and transfer of child support payments.
Previous inquiries and reviews
10.8
The first parliamentary inquiry into child support was conducted by the Joint Select Committee on Certain Family Law Issues, which reported in November 1994. The committee inquired into the 'operation and effectiveness' of the scheme and made 163 recommendations regarding the role of the then Child Support Agency, payment issues, enforcement and the formula for assessing payments.
10.9
In December 2003, the House of Representatives Standing Committee on Family and Community Affairs inquired into and reported on child custody arrangements after separation. The report recommended that a Ministerial Taskforce be established to examine the merits of the assessment formula.
10.10
In May 2005, the Ministerial Taskforce on Child Support reported to the Parliament and made several recommendations for further reform to recognise the care-relationship between separated parents and their children. The Government accepted many of the report's recommendations, which were implemented between 2006 and 2008. The Law Council of Australia (Law Council) submitted that these reforms primarily focussed on changes to aspects of the scheme—such as the meaning of 'shared care', arrangements for paternity disputes and legal protection for parents partaking in self-managed child support agreements.
10.11
The House of Representatives Standing Committee on Social Policy and Legal Affairs tabled a report in July 2015 for its inquiry into Australia's child support program (2015 Child Support Report). The report's recommendations emphasised the importance of mediation, the need to improve communication between Government agencies and proposed a 'trial of limited guarantee' for child support payments. The report also recommended that the child support program be amended to 'ensure the adequacy of calculated amounts and equity for both payers and payees'.
10.12
A complete list of previous inquiries and reviews into Australia's child support system is available in Appendix 5.
The Child Support Scheme: its purpose and clients
10.13
The scheme has two main functions. Firstly, to assess the appropriate amount of child support to be paid for a child following the separation of his/her parents. Secondly, to collect and transfer child support from one parent to the other.
10.14
In 2018–19, the scheme supported approximately 1.2 million children and transferred $3.7 billion in child support payments.
10.15
According to section 5 of the CSA Act, a 'child support case, in relation to a child, is the administrative assessments for child support for all children who are children of both of the parents of the child'. DSS commented that:
It is not uncommon for parents who have more than one child support case to be a payer in one case and a payee in another, although the majority (89 per cent) of payees are female and the majority (also 89 per cent) of payers are male.
10.16
The total number of child support cases increased each year from 1991 (103 106 cases) to 2014 (795 000 cases). Recent figures from DSS illustrate that the number of child support cases has declined over the past five years:
Table 10.1: Number of child support cases
|
|
|
|
|
|
|
789 500
|
783 078
|
778 687
|
777 884
|
767 247
|
Source: Department of Social Services, Annual Report 2015–16, p. 34; Department of Social Services, Annual Report 2018–19, p. 42.
10.17
Approximately 60 per cent of payees and 25 per cent of payers receive some form of income support payment—such as a 'Parenting Payment, Newstart Allowance, Carer Payment or Disability Support Pension'. Parents involved with the scheme generally receive lower incomes compared to parents who have not separated. According to DSS, the 'median adjusted taxable income of child support payees at June 2019 was $23 953', whereas the 'median adjusted taxable income of payers was $47 985'.
10.18
There are also disparities between the distribution of payments, and responsibility for care. For example, the majority of child support payees (65 per cent) have above 86 per cent care of their children, and the majority of payers (65 per cent) have below 14 per cent care of their children.
10.19
Over the years, the scheme has received a discordant mix of praise and criticism. Mr Shane Bennett, Acting Deputy Secretary, Social Security at DSS told the committee:
…we are very mindful that there is a balance to be found, both in terms of the highly sensitive nature of these arrangements and the contested perceptions, making sure that we continue to focus on the object of the scheme and seeking not to undertake changes that could have unintentional consequences.
10.20
The committee heard a range of views concerning the merits of the scheme. For example, former Chief Justice of the Family Court of Australia (Family Court), the Hon Diana Bryant AO QC described Australia's scheme as 'one of the most progressive child support systems in the world'. However, many submitters wrote to the committee about the scheme's perceived inequality and unfairness. These views are presented throughout this chapter.
Administration of the Child Support Scheme
10.21
Following separation, a parent can apply to Services Australia for a child support assessment 'if they are not living with the other parent ... on a genuine domestic basis' regardless of the level of care that they provide for the child.
10.22
To be eligible, the child must meet all of the following requirements:
the child must be under 18 years of age;
the child must not be a member of a couple;
the child must not be cared for under a child welfare law of Western Australia or South Australia; and
the child must be a citizen or resident of Australia or a reciprocating jurisdiction at the time of the assessment.
10.23
The assessment formula bases its calculations for the amount of child support payable on both parents' combined adjusted taxable income and the level of care that they provide for the child.
10.24
The basic formula for calculating the amount of child support to be paid consists of eight steps, which determine:
step 1—each parent's child support income;
step 2—each parents' combined child support income;
step 3—each parent's income percentage;
step 4—each parent's percentage of care (see Table 10.2);
step 5—each parent's cost percentage (see Table 10.2);
step 6—each parent's child support percentage;
step 7—the costs of the children (see Appendix 6); and
step 8—the child support amount.
10.25
DSS explained how the child support amount is applied:
The parent who has a positive child support percentage under step six will be the payer. The annual rate of child support payable is worked out by multiplying the payer's child support percentage from step six by the costs of the child from step seven.
10.26
The assessment also accounts for the amount needed to cover a parent's living expenses, any relevant dependent child expenses and if a parent has multiple child support cases.
10.27
Services Australia uses information from the Australian Taxation Office (ATO) to assess the income status of both parents. If a parent has not lodged a tax return for the previous financial year, Services Australia can calculate a provisional income amount and undertake a new assessment once the tax return has been lodged.
10.28
Parents may apply to have additional income (such as overtime) excluded from the assessment to recognise the 'extra costs to re-establish themselves following separation'. A number of submissions were of the view that overtime should not be taken into account as a part of a child support assessment at all, as it was perceived that this discouraged parents from earning more in order to avoid the requirement to pay more child support.
10.29
For example, Mr Barry Williams, National President of Lone Fathers Association of Australia told the committee:
Many men are paying their child support and they're doing second jobs to try to get a home so they can have access to their kids too, but they're fleeced on that too. The minute you do any overtime or anything like that, or take on a second job so you can buy a house, you get robbed by Child Support again. They're doubling up.
10.30
Each parent's cost percentage is calculated according to their percentage of care:
Table 10.2: Each parent's cost percentage for the child
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|
|
|
0 to less than 14%
|
Nil
|
|
14% to less than 35%
|
24%
|
|
35% to less than 48%
|
25% plus 2% for each percentage point over 35%
|
|
48% to 52%
|
50%
|
|
More than 52% to 65%
|
51% plus 2% for each percentage point over 53%
|
|
More than 65% to 86%
|
76%
|
|
More than 86% to 100%
|
100%
|
Source: Department of Social Services, Submission 95, p. 12.
10.31
The costs of the child are generally calculated in accordance with the parents' combined total income for the most recent financial year. Services Australia adjusts the costs of the child each year to reflect current costs and incomes. The costs of the child set for the year 2020 is available at Appendix 6.
10.32
A number of submissions commented that the costs of the child set by Services Australia do not accurately reflect the actual costs of raising a child in Australia and called for a review of how these costs are determined. For example, one submitter described the amount set by the costs of the children table as 'completely fictitious'.
10.33
Conversely, DSS submitted that the level of care is based on the actual care of the child to recognise the 'direct costs parents incur when providing care'. This in turn assists Services Australia to determine the right amount of financial support that the child needs regardless of custody arrangements.
10.34
The five categories of level of care are:
Table 10.3: Level of care
|
|
|
|
|
Below regular
|
0 to less than 14%
|
0 to 51
|
|
Regular
|
14% to less than 35%
|
52 to 127
|
|
Shared
|
35% to 65%
|
128 to 231
|
|
Primary
|
More than 65% to 86%
|
232 to 313
|
|
Above primary
|
More than 86% to 100%
|
314 to 365
|
Source: Department of Social Services, Submission 95, p. 14.
10.35
A parent assessed as providing below regular care is assessed as not contributing to the costs of the child; and therefore the level of care will not affect the child support assessment. A parent assessed as providing regular care or more is recognised to be contributing to the costs of the child and will be assessed as either a payee or payer according to their income. A parent who has more than 65 per cent care of the child will not be assessed to pay child support 'even if the formula would otherwise have this result'.
10.36
In its submission, DSS stated that disputes concerning care arrangements were 'best dealt with through mediation or dispute resolution, or pursued through the family law system'. The Attorney-General's Department (AGD) noted that for care disputes, Services Australia may determine the level of actual care according an existing arrangement (such as a court order, parenting plan or written agreement formalised by the family courts) until a new assessment has been completed.
10.37
A number of submissions contended that the current formula used by Services Australia worked well in most cases. For example, the Law Council explained that:
Whilst no system of [the Child Support Scheme (CSS)] is perfect, nor will any CSS ever be immune from complaint, and recognising that the child support formula has been in place since 2008, it is the experience of members of the [family law system] that the CSS works for most families. That experience accords with the evidence of the low number of appeals to the [Administrative Appeals Tribunal (AAT)] and from the AAT to the [Federal Circuit Court of Australia (Federal Circuit Court)].
10.38
Conversely, many submitters identified shortcomings within the assessment process—such as perceived unfairness and perceived incentives for non‑compliance. These issues are discussed below.
Perceived unfairness
10.39
A sentiment presented in many of the name withheld and confidential submissions discussed in Chapter 3 was the perception that the decision made by Services Australia for a child support assessment was unfair for the paying parent. A number of public submissions also shared these concerns.
10.40
For example, a submitter told the committee about the perceived unfairness perpetuated by the assessment formula:
The formula also rewards parents for 'not working' by providing them with a higher amount of child support from the paying parent than if they worked. If both parents do this, it creates a race to the bottom – whoever can work the least wins money from the other parent. The level of income from a father should not affect the amount that one family should demand from another family.
10.41
A witness told the committee about the perceived incentive for parents to maximise their care for the child in order to increase the amount of child support that they were entitled to be paid:
Perhaps a simple change to the formula for child-support payments could have a dramatic impact. If a parent is not seeing their children at all and is paying for full child support, it encourages the other parent to keep full custody. If the formula were adjusted for these parents, then it might encourage them to have a healthy custody agreement.
10.42
Another submitter shared similar concerns:
I currently have 2 kids … I have to pay $335 per week in after tax income as child support. I earn $120,000 before tax, she earns $30,000 before tax … When you add in child support and benefits she gets from the government, we are on a similar income after tax … There is no incentive in this case for the primary carer to change their situation. On the other side, I am close to the point of taking a far less stressful job and earning less money as the same principals apply to me. The system actually encourages people to do less in terms of generating income. I am not suggesting my ex is taking advantage of the system, she is simply using what is available. What I am concerned about is that it leaves both parties in a vulnerable position.
10.43
In his submission to the committee, Dr Andrew Lancaster proposed a new formula based on the principle that child support should not be paid in situations where parents share equal care of the child:
When care is 50:50, any automatic child support payments are just a kind of income redistribution. It’s taking from higher earners to give to lower earners for the sake of it. The payments aren’t for the kids because the paying parent is just as likely to spend the money on the kids as the receiving parent. In effect, the payments are only there to try to balance living standards between parents – without boosting living standards for children.
10.44
As discussed in Chapter 8, a substantial amount of submissions supported this sentiment and advocated for '50:50 care' as a mandatory basis for all care arrangements.
10.45
The Australian Brotherhood of Fathers (ABF) was of the view that calculating child support based on a parent's personal income, as opposed to household income, was unfair:
When a parent repartners, their individual financial circumstances might change dramatically independent of their own personal income. For example, a Mother with primary care might repartner and enter into a household with much greater wealth. She may then chose [sic] to stop working and have additional children. Despite the improve [sic] financial circumstances of the Mother and the children, the payer in this circumstance would be required to pay more.
Perceived incentives for non-compliance
10.46
Many submitters expressed concerns regarding perceived incentives for
non-compliance with child support obligations, as set by Services Australia after the assessment is completed.
10.47
For example, Dr Lancaster submitted that parents 'can get the upper hand on their ex by getting their income down and the amount of parenting time up'. Centacare Family & Relationship Services also observed that 'parents may propose to spend more nights' with their children in order to reduce the amount of child support to be paid.
10.48
Another submitter told the committee that:
Linking child support amounts depending on the number of nights a child spends with the primary carer creates an incentive for the primary carer to argue for restrictive time with the other parent as the more time they have with the child the more money they receive.
10.49
Relationships Australia suggested that the formula should be revised so that care is not calculated according to the number of nights that a child spends with the parent as it can impede Family Dispute Resolution to make decisions based on the child's best interests.
10.50
In its submission, Voice4Kids raised another perceived incentive for
non-compliance, regarding the ATO and Services Australia's capacity to investigate cases where 'a parent is earning more than they are declaring'. Voice4Kids observed that this can result in causing unfair financial strain for the receiving parent, and called for Services Australia to investigate instances where a parent was 'claiming to earn little to no money'.
10.51
To manage serious instances of non-compliance, Services Australia uses a number of techniques to identify instances of 'fraud, serious child support avoidance or income minimisation'—including optical surveillance and lodgement enforcement action through the ATO for parents who have not submitted annual tax returns.
10.52
The committee also heard from many submitters that non-compliance with court orders was, in their view, being rewarded by the current child support system. The committee heard on a number of occasions of one parent refusing to provide the other parent the court ordered access to the child/ren and then having the child support amended to recognise that that parent now had 100% care of the children. As one father has explained:
Unfortunately my oldest child has been used as a source of income (mother is long term unemployed) and the child support and welfare system financially reward her with more payments when she contravenes the orders.
All government agencies should use the court orders as the [level] of care a parent has for all social payments including Centrelink and child support payments to remove the incentive to break the orders. Removing all incentives to contravene orders, particularly financial incentives give the orders some weight. In my view the financial incentives also incentivises parental alienation.
10.53
Similarly, another confidential submitter suggested that:
Anyone who receives Child Support and does not comply with access rights handed down by the Court, should not be financially rewarded for this behaviour, in fact they should be financially penalised so as to discourage alienation.
Collecting child support payments
10.54
There are three methods through which child support can be paid or received:
Self-management—parents agree upon and manage the amount, method and frequency of child support payments;
Private Collect—arranged following a child support assessment, agreement or court order specifying the amount of child support to be paid; or
Child Support Collect—Services Australia coordinate the frequency and method of child support payments and facilitate collection and transfer between the receiving and paying parent.
10.55
Mr Bruce Young, Acting General Manager, Child Support, Indigenous and Tailored Services Division, Services Australia noted that child support payments are often made voluntarily via deductions from wages, or direct payments—including where payments are collected by Services Australia.
10.56
The DSS reported that Australia has established arrangements with 97 reciprocating jurisdictions to assist with the collection and transfer of child support, where a maintenance liability has been registered in Australia and either parent lives overseas.
Recovering outstanding child support
10.57
Services Australia cannot collect overdue amounts under self-managed child support arrangements. However, Services Australia can collect overdue payments at any time for Child Support Collect arrangements and for up to three months (or nine months in exceptional circumstances) for Private Collect arrangements.
10.58
Services Australia can employ a number of strategies to attempt to recover unpaid child support before the matter needs to be dealt with by the courts.
10.59
In situations where payers are not forthcoming, Services Australia can negotiate arrangements with the parent in the first instance, and if unsuccessful, can seek information from third parties, or garnishee bank accounts or wages. When required, Services Australia can pursue Departure Prohibition Orders and litigation action through the courts.
10.60
A witness told the committee about her experience trying to recover outstanding child support:
He currently owes over $12,000. Every time an assessment is done he puts in an objection and then that takes quite some time ... [I]t took … six months of being called, giving evidence and sending this and that in for them to make that decision … When I ring Child Support, they go: 'Well, there's not much we can do. You can't get blood out of a stone.' That's all they will do, yet I've had to access my super to keep the family running.
…
He's supposed to pay $400 a fortnight … Intermittently he might pay—for the last financial year he's paid a total of $3,900 for four children. When we were married we used to live off $2,800 a week … Everyone I've had in Child Support has been lovely … but at the end of the day nothing is done to get me that money. They just say: 'You'll get it eventually. When he retires you'll get it out of his super.' It's not going to be much use to me when I'm 70!
10.61
In 2018–19, Services Australia issued 68 314 'nudge letters' to parents who had missed their child support payments. These letters resulted in the recovery of approximately $144 million in outstanding payments. When necessary, Services Australia can set up 'payment arrangements to repay the debt in the shortest possible time based on a parent's capacity to pay'.
10.62
In addition, through its work with the ATO, Services Australia can arrange for any available tax refund to be used to reduce an outstanding child support amount. Employer withholding can also be initiated and deductions from Centrelink or Department of Veteran's Affairs payments can be arranged to recover a current liability or debt.
10.63
Services Australia can enforce the payment of child support liabilities by stopping debtors from leaving Australia, issuing them with a Departure Prohibition Order (DPO). In 2018–19, Services Australia issued 1921 DPOs, which resulted in the collection of just over $28 million in outstanding child support payments.
10.64
The National Council of Single Mothers and their Children (NCSMC) submitted that the $1.6 billion owed in child support payments nationally indicated that the scheme was not 'fulfilling its role' and recommended an inquiry into compliance be undertaken by an appropriate independent body—such as the Productivity Commission.
10.65
In its submission, Safe Steps recommended that the Government address the underpayment of child support and noted:
Mothers head more than 80 per cent of single-parent households and government figures show it is mostly fathers who owe child support debt, making up $1.54 billion of the total $1.64 billion owed nationally. There is an urgent need for government to prioritise addressing the underpayment of child support by fathers. This will support greater parental equity and improve outcomes for children in the context of family separation as well as supporting their health and wellbeing into the future.
10.66
In circumstances where the payee does not receive child support on time for the payer, Victoria Legal Aid recommended that Services Australia provide 'clear and timely reasons to receiving parents, while maintaining privacy obligations, on their decision to not enforce a child support debt'.
10.67
Women's Safety NSW proposed a different approach, where child support payments should be collected by the ATO in a similar way to Medicare levies and Higher Education Loan Scheme repayments.
10.68
Some submitters expressed privacy concerns regarding the appropriateness of the Registrar and staff at Services Australia having access to tax information for child support purposes. For example, the Non-Custodial Parents Party
submitted that section 15D of the CSA Act and section 16C of the CSRC Act should be repealed to 'restore individual privacy' and proposed that greater accountability measures be put in place for child support workers.
10.69
If these various collection methods used by Services Australia fail, a parent can pursue unpaid child support through the courts. The interaction between child support and the family law system is discussed in more detail below.
Interactions with the family law system
10.70
In cases where child support matters cannot be dealt with administratively by Services Australia, the legislation provides for a parent to pursue action through the courts.
10.71
The DSS told the committee:
The main interaction between the family law system and the child support system happens where separated parents have formalised their care arrangements for their children through family law processes, such as in a court order or parenting plan.
10.72
The AGD further explained:
The CSA Act and CSRC Act, and the relevant rules of court, provide the family courts with certain powers in relation to child support matters, including the power to enforce a child support liability or recover a child support debt … [T]he CSRC Act provides that a child support liability may be recovered in a family court by a child support Registrar or payee of a liability … [T]he CSA Act [also] provides that the majority of provisions of the Family Law Act apply to proceedings under the CSA Act.
10.73
Although unable to take legal action in more than one court at the same time for the same debt, the Registrar may take successive actions using different enforcement processes.
10.74
With this considered, DSS told the committee:
… the child support system recognises a parent's obligation to provide support for their child is not tied to the other parent's compliance with a court order or care agreement.
10.75
A number of matters relating to aspects of the scheme can be pursued through the family law system. This includes change of assessments, reviews and appeals of child support decisions, court orders and child maintenance, as well as issues with proving parenting.
Change of assessments
10.76
Services Australia can change a child support assessment if they are 'satisfied there are special circumstances and the change would be fair to both parents and the child'.
10.77
In its submission, DSS told the committee:
The formula, as it works, is based on adjustable taxable income, where it then is expected to add back a number of benefits to represent the true financial circumstances of … the payer. If there is a circumstance where someone believes that someone is arranging affairs to be beneficial, they can apply for what is known as a change of assessment.
10.78
A parent can apply for a change of assessment if there is evidence of changes to at least one of ten conditions:
costs of visiting or communicating with the child;
special needs of the child;
costs of education or training;
additional payments or transfers of money, good or property;
necessary commitments of self-support;
income, assets and earning capacity; and/or
responsibility to maintain a resident child.
10.79
Most change of assessment applications are managed and decided by Services Australia. DSS reported that there were approximately 17 000 applications for a change of assessment in 2018–19, with 46 per cent resulting in a change which was perceived to better reflect the circumstances of the parent and child. Of these applications, approximately 57 per cent of cases 'related to a parent's income, property, financial resources or earning capacity'.
10.80
Applications that are unable to be managed administratively are directed to the relevant court for a decision. For example, section 118 of the CSA Act provides that a parent can apply to a court for a change of assessment decision in relation to a case that has ended or if a 'child support agreement has been set aside by the court under section 136'.
Child maintenance payments
10.81
Under the Family Law Act, the Federal Circuit Court and Family Court are empowered to make orders for child maintenance payments for children not covered by child support legislation. These orders can be made either by the consent of each party, or by the judgment of the court.
10.82
Some parents are unable to apply for an administrative assessment to coordinate child support payments as a part of the scheme. By way of example, DSS described that:
... a court order would be required for a child who is aged 18 years or older who has a physical or mental disability, or where the other parent lives in a country that does not have reciprocal arrangements with Australia to accept administrative child support assessments.
10.83
A court is empowered to order that a payment be made in a lump sum or in periodic payments, impose terms and conditions and set an end date for the order. A court can also recover arrears under a child maintenance order.
10.84
The Law Council highlighted the challenges associated with enforcing child maintenance orders:
Parents receiving child maintenance were left with the difficulty of having to enforce the child maintenance order against the paying parent, with all the attendant cost, both personally and financially, of yet further court proceedings. Typically, the parent (usually the mother) lacked the income and financial resources to enforce child maintenance orders whilst at the same time shouldering the burden of a child or children to financially support.
10.85
Services Australia must be provided with a copy of the order, to enable it to collect payments as required by the order and as part of the scheme. Services Australia can also collect payments made pursuant to the following orders:
parentage overpayment orders;
orders for step-parents to pay child maintenance;
spousal and de facto maintenance orders;
court-registered agreements; and
registered overseas maintenance liabilities from reciprocating jurisdictions.
10.86
Depending on the circumstances, child maintenance orders expire either at a specified time or when a particular event occurs—such as the death of a parent or child, when the child finishes secondary school, or when the child turns 18 years of age.
10.87
Springvale Monash Legal Service recommended that the CSA Act be amended to allow the administrative provision of child support for a child until they complete secondary school even if they are already 18 years old, to eliminate the requirement for parents to pursue a child maintenance order through the courts.
Enforcement hearings and enforcement orders
10.88
If a paying parent owes child support under a Family Court or Federal Circuit Court order, agreement or child support liability, the payee can apply for an enforcement hearing to recover the outstanding child support by filing an application and an affidavit.
10.89
At least 14 days prior to an enforcement hearing, the payee must personally serve the payer with the following:
a copy of the application;
a list of documents to be produced (and written notice demanding the production of those documents); and
a copy of the Family Court and Federal Circuit Court's Enforcement Hearings brochure.
10.90
At the hearing, the court will identify the amount of child support that is owed by the paying parent. It can then make an order for the amount be paid, either in full or by instalments. The payer may also be examined about their financial affairs and be asked to provide evidence in support of their failure to fulfil their obligation to pay child support. The court is unable to assess an order, agreement or child support liability at the enforcement hearing.
10.91
In some circumstances the payer is not required to attend the enforcement hearing:
A payer may, with the agreement of the payee, produce the documents to the payee at a time and place agreed before the day of the enforcement hearing. If the payee is satisfied with the information provided, the payee may give written notice to the payer and the Court, discontinuing the application. In this situation, the payer is no longer required to attend the enforcement hearing.
10.92
The courts can impose a penalty for a parent who does not provide the required documentation, does not attend the hearing, or if the parent fails to provide an answer to the court's satisfaction.
Reviews and appeals of child support decisions
10.93
If a parent does not agree with the decision for child support made by Services Australia, they can formally object to the decision in writing, within 28 days of receiving the Registrar's notice of decision (or 90 days for a parent living in an overseas reciprocating jurisdiction).
10.94
Services Australia can consider objections if the parent believes that Services Australia has used incorrect information, has not considered all related matters, missed important details or not applied the law correctly. A party cannot object to parentage, the collection of payments, changing a Departure Prohibition Order or refusing a Departure Authorisation Certificate.
10.95
For matters unable to be reviewed as part of the objection process by Services Australia, a parent can appeal the decision to the Social Services and Child Support Division of the AAT. In 2018–19, only 14 per cent of applications to this Division related to child support matters (noting that 85 per cent of applications sought to appeal Centrelink decisions).
10.96
The AAT's annual report recorded the following figures for decisions relating to child support matters finalised in 2018–19:
Table 10.4: Decisions finalised by the AAT for child support matters in 2018–19
|
|
|
|
Care percentage decision
|
703
|
|
Change of assessment
|
923
|
|
Non-agency payment
|
144
|
|
Particulars of the assessment
|
260
|
|
Refusal of extension of time to object
|
137
|
|
Other
|
226
|
|
Total decisions
|
2356
|
Source: Administrative Appeals Tribunal, Annual Report 2018–19, p. 43.
10.97
If a parent is dissatisfied with the decision made by the Social Services and Child Support Division of the AAT to affirm, vary or set aside the application, they can apply for a second review with the AAT's General Review Division.
10.98
Where a parent is still not satisfied with the AAT's decision, they can appeal the decision with the Family Court or the Federal Circuit Court on a question of law. In 2018–19, only 22 of the 85 234 filings in the Federal Circuit Court were a result of child support appeals from the AAT.
10.99
The Law Council and the Hon Diana Bryant were of the view that the low number of appeals to the Federal Circuit Court indicated that the application process to the AAT worked well.
Proving parentage
10.100
Services Australia must be satisfied that the persons to be assessed in relation to the costs of the child are the parents of the child. The administrative scope for this process is limited and parentage disputes often need to be referred to the courts for resolution.
10.101
Where an application for a child support assessment has been refused 'due to lack of evidence as to parentage', a person may apply to a court for a declaration that 'the application should have been accepted because the person named is a parent of the child' under section 106A of the CSA Act. Conversely, a person may also apply to a court 'for a declaration that they are not a parent of the child under section 107 of the CSA Act'.
10.102
A number of submissions raised concerns regarding the evidence required to prove parentage. For example, Victoria Legal Aid observed that proving parentage can be challenging in circumstances where 'a person is determined to be the parent through DNA testing but then refuses to sign a statutory declaration to acknowledge [parentage]'.
10.103
To enable the Registrar to accept an application using accredited DNA evidence, Victoria Legal Aid recommended that section 106A of the CSA Act be amended to allow DNA evidence, without the requirement for a declaration of parentage. Victoria Legal Aid also recommended that the CSA Act be amended to allow the Registrar to end an administrative assessment using DNA evidence as under the current legislation it is only possible to end an administrative assessment through court proceedings.
Conflict and domestic violence
10.104
Many submitters to the inquiry expressed concerns regarding situations where child support is used to perpetuate financial abuse after separation.
10.105
Domestic Violence Victoria raised concerns about the scheme's capacity to effectively identify and manage 'family violence and controlling behaviours'. Engender Equality called for increased training to assist child support workers to identify 'cases where domestic or family violence exists, and to provide the information, support, assistance, and referral that may be required'.
10.106
In its submission, DSS outlined the training provided to staff at Services Australia:
Staff have been trained in the use of the Child Support Risk Identification and Referral Model, which provides a systematic method to identify parents with a set of determined risk factors that indicate possible need for intensive support and/or referral … If a staff member identifies a person experiencing or at risk of family and domestic violence, they record a family violence sensitive issue indicator on their record. This indicator is an internal customer management tool that enables staff to identify and provide appropriate support and referral options to the person. The indicator does not identify the perpetrator.
10.107
According to Women's Legal Service Queensland, most women who have experienced domestic violence prefer to seek an exemption from Centrelink—rather than to submit a child support assessment application—to reduce the risk of exposing themselves to further abuse. The Hume Riverina Community Legal Service also noted the 'philosophical tension' associated with applying for such an exemption as it can appear to reward 'perpetrators of violence … for their conduct'.
10.108
The Australian Institute of Family Studies submitted that parents experiencing domestic violence were less likely to receive child support payments in full and on time. This can create more challenges for parents who rely on child support payments to care for their children. Women's Legal Service Queensland also noted that perpetrators may withhold or intermittently pay child support as a means of financial abuse.
10.109
Women's Safety NSW described how the 'refusal to pay child support can be a powerful mechanism by which a person may continue to exert power and control over their ex-partner' and recommended that section 4 of the Family Law Act be amended to recognise child support as a relevant factor in determining the existence of financial abuse.
Proposal to trial guaranteed child support payments
10.110
A number of submissions proposed a new child support system to guarantee that payments are made to the payee parent. Under this framework, any unpaid child support would become a debt to the Australian Government to be pursued accordingly.
10.111
Such a system was one of the recommendations made by the 2015 Child Support Report. The 2015 Child Support Report recommended that 'the assessment, modelling and potential trial of a limited financial guarantee for either vulnerable families or a randomised sample of [child support] clients'.
10.112
The 2015 Child Support Report also recommended that this trial be designed to ensure that it would 'not create a substantial drain on public finances'.
10.113
The NCSMC supported the implementation of the trial proposed by the 2015 Child Support Report, and called for the trial of a:
… State Guaranteed Child Support Payment, as recommended by the 2015 Parliamentary Inquiry into the Child Support Program. It would be sensible to commence an agreed trial for women affected by Domestic Violence including postseparation financial abuse. The only safety mechanism for women in the child-support scheme is the option not to pursue childsupport [sic]. The current policy places the burden upon the victim to have knowledge of the exemption process, undertake the application process and then hopefully be granted an exemption. Penalties and/or failures for not pursuing child-support can reduce critical Family Tax Benefit Part A resources. A State Guaranteed Payment would be a second option for women and children affected by domestic violence. Currently, the system provides a perverse incentive that financially reward abusive payers (typically men), as they may be exempt from paying any form of child support.
10.114
Women's Legal Service NSW explained that guaranteed payments would assist in improving financial security for mothers after separation, and help to eliminate the risk that child support would be used to perpetrate abuse.
10.115
Women's Safety NSW was also of the view that:
…the onus should not be on a victim/survivor of domestic violence and abuse to chase her abuser for necessary payments to support the children's basic needs… allowing the abuser to remain unaccountable.
10.116
The Government did not agree with the recommendation to consider a trial of limited financial guarantee by the 2015 Child Support Report and was of the view that:
… the child support scheme should continue to ensure that parents are responsible for the payment of child support. The payment of government family assistance is currently payable at a higher rate if child support payments collected by the Department of Human Services [now known as Services Australia] are not received and would otherwise have reduced the rate payable, and this will continue to apply.
10.117
The Law Council shared similar concerns in its submission and noted that the current scheme 'reflects the community expectation that parents share in the cost of supporting their children according to their capacity, rather than burden the taxpayer'.