CHILD SUPPORT LEGISLATION AMENDMENT (REFORM OF THE CHILD SUPPORT SCHEME—INITIAL MEASURES) BILL 2006
Mr CADMAN (Mitchell) (11.29 a.m.)—This is a long process that is coming to fruition. The original proposals were made, I suspect, by the parliamentary inquiry into child custody arrangements in the event of family separation, which was undertaken in 2003 by the House of Representatives Standing Committee on Family and Community Affairs.
That committee received 1,700 submissions and heard from over 200 witnesses. I was a member of that committee, and the committee’s report, Every picture tells a story, was a comprehensive study of the pain and trauma that can often occur with family breakdown and separation. Above all things, as a group from the House of Representatives, we were conscious that the people who suffered the consequences of family breakdown more than any others, even more than the separating partners, were the children of any union, marriage or arrangement. So it was on the future of the children that the committee tended to focus.
Initial responses to our inquiry were generally favourable, although there is continuing concern in men’s groups—understandably—about the recommendations in that they did not go far enough, particularly in the area of fifty-fifty shared care. We as a committee felt that the first thing that separating parents should apply their minds to was the future of the children, so we focused not on shared care so much as on equal parental responsibility. That is not the case at the moment. At the moment, the person who has custody of the children seems to have more say than others about their future. We considered that both parents should have equal responsibility in deciding the future of the children, no matter who was the custodial parent. We also felt that grandparents should play a part in this process, as well, so grandparents receive attention in the report.
There was general community support for the committee’s report and general support from community groups for the concept of shared responsibility. We have requested the courts—and I am pleased to find that the Attorney-General is giving instructions to the Family Court—that, as a starting point, fifty-fifty shared care should not be rejected but should be considered. The way it will work—and the implementation stages are already moving ahead—is that, firstly, there will be shared parental responsibility and then, flowing from that, the prospect of shared care. The proposals also included more services to assist parents in reaching workable post-separation arrangements and more child-focused programs.
On 29 July 2004, in response to the committee’s report, the government announced a process to look at the arrangements for child support, and a ministerial task force on child support was established following the reforms to the family law system. An improvement in the outcomes for children was the goal of the task force. The task force recommended consultation processes prior to the establishment of the 65 family relationship centres around Australia, a 30 per cent increase in funding for services funded under the Family Relationships Services Program, a further expansion of the Family Relationships Services Program and establishment of a further task force. Public consultation followed and the announcement was made in August 2004 that a task force would be chaired by Professor Patrick Parkinson of the Faculty of Law at the University of Sydney. Professor Parkinson is also the Chairperson of the Family Law Council. The focus of the task force was to be on policy considerations, not on the administration of the scheme. The task force included a range of members with expertise in one or more of the following areas: research on separating families, the cost of raising children, social and economic policy and family law. The task force presented a report to the government entitled, In the best interests of children: reforming the Child Support Scheme, and it is a very interesting and well prepared report.
The Child Support Legislation Amendment (Reform of the Child Support Scheme—Initial Measures) Bill 2006 before the House today is the first part of a three-part response to that task force report and to the committee’s effort. In the area of child support, the committee made a number of observations. The House of Representatives Standing Committee on Legal and Constitutional Affairs particularly remarked on the complexity of the formula used to decide the amount of financial support children should receive in the case of separation. The formula applies fairly rigidly unless there are some very definite indications that it cannot be complied with. We found as a committee that the weapons used by separating parents revolve around the children, and they are generally these: the weapon of the custodial parent is to deny access to the children; the weapon of the non-custodial parent is not to pay for the support of the children. So that is where the battleground is, and it is a vicious and hateful battleground. It is a tragic battleground on which the children alone are the ones who really suffer.
I remember one lady in Gunnedah who gave evidence to the committee that she had spent $260,000 on legal costs, the entire proceeds of the settlement she had received from her former husband, in order to spear him and make him comply with her wishes. She said:
I’ve spent the money and he’s still the same, but at least he’s seeing kids now and that’s all I wanted. I wanted proper acknowledgment from him. I failed to get him to pay, which is part of what I wanted, but above everything I wanted him to continue to be a good dad.
She had wasted the family’s entire savings because of viciousness between her and her former husband. That story is not unusual—the hatred and viciousness of, on the one side, women, who are generally the custodial parent; and, on the other, men, who can resort to violence and become unemployed purely to get back at their former partner. However, the kids suffer from the lack of support given for their accommodation, from changes in the provision of their shelter and from disruptions to their schooling. There is a whole range of factors that work against the interests of children, simply because men will not support women in such a situation.
The formula caught the attention of the Standing Committee on Family and Community Affairs, of which I was a member. The Child Support Consultative Group, which gave evidence, pointed out that separating the discrete costs of children from the total family costs is a problem confronting all studies where an examination is made of the cost of raising children. Regarding the development of the formula, the Child Support Consultative Group said that, as the number of children in a family increases, the per-child cost declines. I think we all know that; that is commonsense. More money is spent on children as they grow older. On average about 20 per cent of a family’s income is devoted to the first child. When the Australian data was separated from the international data, a lower figure of about 16 per cent was arrived at, so we were delving into difficult areas in trying to establish such facts. The Child Support Consultative Group said that the shares of income devoted to the second and third child were each about half of that devoted to the first child; and shares devoted to subsequent children were about half of that devoted to the second and third children—their cost reduces to about 25 per cent of the cost of the first child. It costs less to maintain an intact family at a given standard of living than it does to maintain the same family with separated parents. That is not obvious to many parents who are in the process of separating. They think they can carry on their former lifestyle without penalty. That is not possible. The share of income devoted to a child in a one-parent family is higher than in a two-parent family.
The recommendations of the House of Representatives committee were taken up by Professor Parkinson. The first recommendation in his report to the government, entitled In the best interests of children, dealt with the difficult issue of the formula. In recommendation No. 1, he said:
The existing formula for the assessment of child support should be replaced by a new formula based upon the principle of shared parental responsibility for the costs of children.
One would think that is self-evident and would have always been the case—but that is not so. The government, taking these steps in the legislation as the first part of a three-part program, has made a number of changes. One change is to increase the minimum payment. The current payment is $5, which is nothing. But if a parent—and generally it is the male—is unemployed and has little likelihood of gaining employment, $5 is the cost and many do not pay it; in fact, 40 per cent do not pay it. As there needs to be greater acceptance of responsibility for children, this legislation contains a provision for an increase in the minimum payment.
This legislation lowers the cap on income considered for child support purposes, thereby reducing the maximum rates of child support. Let me give the House an example. One of the major criticisms we came across was that, for high-income earners, the formula currently applying produces an impossibly high level of funding capable of being expended on children. The figure of $34,000 a year currently being received by a parent for two children will be lowered to $24,000. I do not know how anybody could possibly spend $17,000 a year on a child under the age of five. It is just not possible, so the formula has been changed. If, in the view of a court when considering separation and Family Court matters, there is a need to maintain a certain lifestyle, that should be considered as a separate issue and not as a maintenance of children issue. That was the goal of the committee, which was universally agreed by members of the committee, picked up by Professor Parkinson in his report and now endorsed in legislation by the government—a sensible change.
The legislation provides for fairer decisions in relation to whether a parent has extra earning capacity. This is the overtime factor. The non-custodial parent is required to pay according to a formula, and I need to give the House some understanding of what that might be. For one child, it is 18 per cent of gross income; for two children, it is 27 per cent; for three children, it is 32 per cent; for four children, it is 34 per cent; and for five or more children, it is 36 per cent. That formula, which was locked in place, is now in the process of being changed—but not by this legislation; that comes next. So the process of change is down the track.
This legislation makes provisions for circumstances where a person is locked into the current formula and it is impossible for them to maintain themselves. We had evidence from many people in dire circumstances endeavouring to live up to their responsibilities, maintain rented accommodation, provide for their children when they have custody as part of a shared arrangement and endeavouring to provide for the odd needs such as clothes or other items that the children need when they are in that casual accommodation arrangement from week to week, maybe every second weekend and half the school holidays. To have all of their overtime efforts counted as part of the child support process was something we considered to be unfair. The formula is changing in regard to a person making extra effort and providing extra capacity.
There is also an increase in the legislation on the amount a parent can have spent directly on the essential needs of their child, from 25 to 30 per cent—that is not a recommendation of the committee; the committee thought it should be higher than that. I will give an example. Somebody may be married to a person who is quite wealthy and is able to provide well for additional children. The non-custodial parent may demand that the children have essential needs—such as for school fees, clothing, school excursions, perhaps medical services—but only 25 per cent of their contribution can be directed towards payment for those things.
There is a weird proposal that a doctor has to say that a child is in need of medical services before these payments can be allocated to medical care. I would have thought a doctor’s bill is sufficient to say that a child is in need of medical care, rather than having to first of all get a letter from a doctor to decide whether these payments can be allocated to the medical care of children. It seems to be absolute bureaucratic overkill to say that doctors need to advise the CSA that this care is needed. Nobody is going to take a kid to a doctor just for the sake of it. There are some real problems with the whole way in which this was bedded down in the first place, but the changes we are making now are fairer, and they are really going to help couples focus on the children.
Australia has one of the most interventionist family courts in the world. Most courts worldwide force parents to consider for themselves what is best for the children. We do not do that. We let the court get involved in these relationships from day one. This legislation is going to change that slightly. It is going to force parents—recognising they are probably never going to like each other very much—to think of their children first. That must be a goal that this House maintains for any future changes. Another provision in this legislation ensures that the child support arrangements for exnuptial children in Western Australia are constitutionally valid, which is a change that one would expect in order to recognise the role of the Family Court in Western Australia.
So the prescribed non-agency payment is rising to 30 per cent, which allows the non-custodial parent, where necessary, to direct more funds specifically towards the care of the children. Many paying parents would like this percentage to be higher, because they consider their children may not be well looked after, but the government settled for 30 per cent. I commend the minister, Mal Brough. He has been working on this issue ever since he came into the parliament, trying to get a better deal for both parents. He saw the pain of dads and he saw the problems in families, and he is trying to rectify them.
Author: Hon Alan Cadman MP
Source: House Hansard - 24th May 2006
Release Date: 22 Jun 2006