Family Assistance and Child Support Legislation Amendment (Protecting Children) Bill 2017

Bills Digest No. 79, 2017–18

PDF version [499KB]

Michael Klapdor and Alex Grove
Social Policy Section
12 February 2018

 

Contents

The Bills Digest at a glance

Purpose of the Bill

Structure of the Bill and Bills Digest

Committee consideration

Senate Standing Committee for the Scrutiny of Bills

Statement of Compatibility with Human Rights

Parliamentary Joint Committee on Human Rights

Schedule 1—Child support amendments

Background
The Child Support Scheme
Who receives child support
Table 1: child support recipients by state and territory and mode of collection, 31 December 2016
Table 2: median income of child support recipients by state and territory, 31 December 2016
Child support assessments
Child support agreements
Court orders
House of Representatives committee report on child support
Extending interim determination periods
Tax assessments
Setting aside child support agreements
Collection of overpayments
Policy position of non-government parties/independents
Position of major interest groups
Financial implications
Key issues and provisions
Part 1—Interim care determination periods
Key provisions
Part 2—Amended tax assessments
Key provisions
Part 3—Child support agreements
Key provisions
Part 4—Child support overpayments
Key provisions

Schedule 2—Family tax benefit amendments

Background
Immunisation
National Immunisation Program
‘No Jab, No Pay’ policy
Immunisation rates under ‘No Jab, No Pay’
Table 3: proportion (%) of children fully immunised by age and year
Number of people who lost eligibility for the FTB-A supplement
Table 4: percentage of Family Tax Benefit children meeting immunisation requirement
Healthy Start for School policy
Income limit placed on the FTB-A supplement
2017–18 budget measure
Policy position of non-government parties/independents
Position of major interest groups
Financial implications
Key issues and provisions
Has the No Jab No Pay policy improved immunisation rates?
Key provisions

 

Date introduced:  14 September 2017
House:  House of Representatives
Portfolio:  Social Services
Commencement: various dates set out in the table at clause 2.

Links: The links to the Bill, its Explanatory Memorandum and second reading speech can be found on the Bill’s home page, or through the Australian Parliament website.

When Bills have been passed and have received Royal Assent, they become Acts, which can be found at the Federal Register of Legislation website.

All hyperlinks in this Bills Digest are correct as at February 2018.

 

The Bills Digest at a glance

The Family Assistance and Child Support Legislation Amendment (Protecting Children) Bill 2017 (the Bill) will amend family assistance and child support law to implement changes to child support and the No Jab No Pay immunisation requirements for Family Tax Benefit Part A (FTB-A). The measures were announced in the 2017–18 Budget.

The proposed child support changes are primarily based on recommendations from the House of Representatives Standing Committee on Social Policy and Legal Affairs Committee’s 2015 report on the child support program.

The child support changes include:

  • Allowing for longer interim periods (which apply before child support and Family Tax Benefit payment arrangements are recalculated to reflect changes in actual care arrangements for children) within a year of court-ordered care arrangements; and allow for interim periods to be extended in relation to older court-ordered care arrangements where the person with increased care does not take reasonable action to participate in family dispute resolution.
  • Allowing for amended tax assessments to be taken into account by the Child Support Registrar in child support assessments, if it results in a higher taxable income or, where it results in a lower taxable income, under certain conditions.
  • Introducing a separate and less restrictive test for courts to set aside child support agreements entered into prior to 1 July 2008 where the agreement was made without at least one of the parties obtaining legal advice; and, allow for all child support agreements to be set aside without having to go to court if the person who is entitled to child support under the agreement ceases to be an eligible carer of the child.
  • Aligning recovery methods available to the Registrar for overpayments to child support payees with the current methods available for recovering debts from payers (including the use of departure prohibition orders); allow for overpayments resulting from backdated reductions to an assessment or other maintenance liability to be recovered by the Registrar in most instances; and amend the backdating provisions for retrospectively creating overpayments or arrears.

While some of these changes address important issues raised by key stakeholders and families involved with the child support program, others appear to address anecdotal concerns raised during the committee process and little evidence has been presented in support of the changes. In particular, aligning debt recovery provisions for payee overpayments with those that currently apply to payers has not been supported by evidence showing that the existing recovery provisions for overpayments are not working or that there is a significant problem of payers not being reimbursed any overpayments.

The proposed changes to the immunisation requirements for FTB-A will see families who do not meet health check or immunisation requirements for a child lose approximately $28 per child from their fortnightly payment from 1 July 2018. This measure will replace the existing No Jab, No Pay measure which makes payment of the end-of-year FTB-A supplement dependent on children meeting health check or immunisation requirements.

The changes will see a more immediate financial penalty applied to families who do not meet the immunisation or health check requirements, and will ensure that those families no longer in receipt of the FTB-A supplement (as a result of a recently introduced $80,000 income limit) are still captured by the requirements.

There has been a small improvement in immunisation coverage rates since the No Jab No Pay policy commenced in 2016. However, it is difficult to disassociate the impact of the financial penalty measures from other Australian Government immunisation measures implemented around the same time, advertising campaigns and media coverage of the issue, and some state and territory governments implementing ‘no jab, no play’ policies to prevent non-vaccinated children from attending child care services.

Purpose of the Bill

The purpose of the Family Assistance and Child Support Legislation Amendment (Protecting Children) Bill 2017 (the Bill) is to amend the A New Tax System (Family Assistance) Act 1999 (FA Act), the A New Tax System (Family Assistance) (Administration) Act 1999 (FA Admin Act), the Child Support (Assessment) Act 1989 (CSA Act), and the Child Support (Registration and Collection) Act 1988 (CSRC Act) to implement changes to the child support program and the ‘No Jab, No Pay’ immunisation requirements for family assistance payments.

The measures in the Bill were announced in the 2017–18 Budget.[1]

The proposed child support changes will:

  • from the day after Royal Assent, allow for longer interim periods (which apply before child support and Family Tax Benefit payment arrangements are recalculated to reflect changes in actual care arrangements for children) within a year of court-ordered care arrangements; and allow for interim periods to be extended in relation to older court-ordered care arrangements where the person with increased care does not take reasonable action to participate in family dispute resolution
  • from the day after Royal Assent, allow for an amended tax assessment to be taken into account by the Child Support Registrar in child support assessments, if it results in a higher taxable income or, where it results in a lower taxable income, under certain conditions
  • from 1 July 2018, introduce a separate and less restrictive test for courts to set aside child support agreements entered into prior to 1 July 2008 where the agreement was made without at least one of the parties obtaining legal advice; and allow for all child support agreements to be set aside without having to go to court if the person who is entitled to child support under the agreement ceases to be an eligible carer of the child and
  • from 1 July 2018, align recovery methods available to the Child Support Registrar for overpayments to child support payees with the current methods available for recovering debts from payers; allow for overpayments resulting from backdated reductions to an assessment or other maintenance liability to be recovered by the Registrar in most instances; and amend the backdating provisions for retrospectively creating overpayments or arrears.

The proposed changes to the immunisation requirements for family assistance payments will see families who do not meet health check or immunisation requirements for a child lose approximately $28 per child from their fortnightly payment for Family Tax Benefit Part A (FTB-A) from 1 July 2018. This measure will replace the existing No Jab, No Pay measure which makes payment of the end-of-year FTB-A supplement dependent on children meeting health check or immunisation requirements.

Structure of the Bill and Bills Digest

The Bill is divided into two Schedules: one containing the child support provisions and other the immunisation requirement provisions. This Bills Digest will address the background and issues for each Schedule separately.

Committee consideration

At the time of writing, the Bill had not been referred to any committees. The Senate Selection of Bills Committee considered the Bill but could not reach agreement.[2]

Senate Standing Committee for the Scrutiny of Bills

In Scrutiny Digest 12 of 2017, the Senate Standing Committee for the Scrutiny of Bills raised concerns with two aspects of the amendments proposed by Schedule 1: the retrospective effect of certain provisions, and the extension of the departure prohibition scheme to debts arising from child support overpayments.[3] The Committee sought the Minister’s advice in relation to any retrospective effects and whether anyone would suffer detriment as a result of retrospective provisions.

In regards to departure prohibition orders[4], the Committee noted that such orders had previously raised concerns regarding freedom of movement and the lack of merits review (in the context of social security legislation):

In particular, the committee is concerned that the question of whether it is appropriate to impose a DPO [Departure Prohibition Order] in individual circumstances depends on whether the Registrar is 'satisfied' of certain matters, leaving a broad discretion to the Registrar to determine if a DPO should be made.

In addition, the DPO scheme does not provide for merits review of the Registrar's decision. Although section 72Q of the Child Support Act provides that an appeal from a decision to make a departure prohibition order may be made to the Federal Court of Australia or Federal Circuit Court of Australia, this is expressly made subject to Chapter III of the Constitution (and would, in any event, necessarily be read as subject to the Constitution). The result is that the appeal would be limited to questions about the legality of the decision rather than enabling the court to review the merits of the original decision.[5]

The Committee drew its concerns regarding departure prohibition orders to the attention of Senators.[6]

Scrutiny Digest 13 of 2017 included a response from the Minister in regards to the Committee’s concerns on the retrospective effect of some of the proposed amendments.[7] The Minister’s correspondence expanded on the explanations for the amendments in the Explanatory Memorandum, primarily justifying the retrospective application of the provisions on the basis that they would make the system fairer, or to ensure the operation of the provisions were in line with the objectives of the system and its legislation.[8]

The Committee requested that key information provided in the Minister’s response be included in the Explanatory Memorandum.[9] It also sought further information in relation to the retrospective effect of item 51 of Schedule 1, and whether it would have any effect on cases currently before the courts.[10] Item 51 is an application provision relating to the amendments by items 46 and 47. Items 46 and 47 related to treating child support agreements with certain provisions as if they were orders made by a court.

Scrutiny Digest 15 of 2017 included a further response from the Minister in relation to the Committee’s requests. The Minister indicated his intention to ‘table an addendum to the explanatory memorandum’ regarding the retrospectivity of provisions in the Bill.[11] In relation to item 51, the Minister stated:

The application provision at item 51 enables the amendments made by items 46 and 47 of the Bill to apply to terminating events that occur on or after commencement. The amendments will not have retrospective effect, however, they may apply to any agreement taken to be a consent order, regardless of whether the agreement was made before or after commencement of the amendments. In relation to whether the proposed changes would apply to any cases currently before the courts. Any decision made by the courts involving an interpretation of existing sections 35C and 95 of the Child Support (Assessment) Act 1989 before the commencement of item 51 would be upheld, and decisions made after the commencement of item 51 would be made in line with the amended sections 35C and 95.[12]

Statement of Compatibility with Human Rights

As required under Part 3 of the Human Rights (Parliamentary Scrutiny) Act 2011 (Cth), the Government has assessed the Bill’s compatibility with the human rights and freedoms recognised or declared in the international instruments listed in section 3 of that Act. The Government considers that the Bill is compatible.[13]

Parliamentary Joint Committee on Human Rights

In its 11th Scrutiny Report of 2017, the Parliamentary Joint Committee on Human Rights stated the Bill did not raise human rights concerns.[14]

Schedule 1—Child support amendments

Background

The Child Support Scheme

The Child Support Scheme (CSS) was introduced in June 1988 by the Hawke Government. The CSS is intended to assist separated parents in taking responsibility for the financial support of their children.[15] The CSS assesses amounts of child support in accordance with a formula and collects and enforces these assessments, child support agreements and court orders.

The CSS is administered under the CSRC Act and the CSA Act. The Minister and Department of Social Services is responsible for the general administration of the CSS while the Child Support Registrar        in the Department of Human Services has decision making powers under the legislation and has responsibility for decisions in individual cases.[16]

In 2016–17 around $3.5 billion in child support was transferred with CSS support for around 1.2 million children.[17] The person entitled to receive child support, the payee, can nominate to have child support payments transferred privately (known as private collect), or via the Department of Human Services (known as child support collect). In 2016–17, around 52.3 per cent of child support cases used private collect arrangements—$1.5 billion was transferred via child support collect and $2.0 billion was expected to be transferred via private collect.[18]

Who receives child support

Table 1 shows the number of child support recipients by state and territory and by mode of collection as at 31 December 2016.

Table 1: child support recipients by state and territory and mode of collection, 31 December 2016

State/territory Dept. of Human Services collect Private collect
ACT 3,958 4,179
NSW 88,671 98,868
NT 3,270 2,875
Qld 78,891 74,786
SA 24,795 24,089
Tas 9,633 9,577
Vic 67,665 70,962
WA 35,422 30,399
Overseas/unknown 20,124 40,927
Total 332,429 356,662

Sources: Senate Community Affairs Committee, Answers to Questions on Notice, Social Services Portfolio, Additional Budget Estimates 2016–17, Questions SQ17-000122 and SQ17-000125.

Of child support recipients whose gender is known, 86 per cent were identified as female and 14 per cent were identified as male.[19]

Table 2 sets out the median income of child support recipients.

Table 2: median income of child support recipients by state and territory, 31 December 2016

State/territory Median income
ACT $42,225
NSW $24,138
NT $32,095
Qld $24,622
SA $23,076
Tas $22,195
Vic $23,739
WA $24,945

Source: Senate Community Affairs Committee, Answers to Questions on Notice, Social Services Portfolio, Additional Budget Estimates 2016–17, Question SQ17-000154.

As at 31 December 2016, around 56 per cent of child support recipients were also in receipt of an income support payment (such as a pension or allowance) from the Department of Human Services or the Department of Veterans’ Affairs.[20]

Amongst active child support cases in December 2016, 24 per cent of recipients were owed arrears and the average amount of arrears owing was $5,800.[21]

Child support assessments

Child support assessments are conducted by the Child Support Registrar and a parent or non-parent carer, who is considered an eligible carer for a child, can apply for an assessment. These are administrative assessments by the Department of Human Services which determine amounts of child support that might be payable by one parent to another according to a formula.

The formula assesses the income of both parents, deducts an amount needed for self-support, determines the percentage of care each parent has for each child and what costs are met through that direct care. If a parent’s share of their combined income remains positive, after adjusting for the share of costs met through direct care, then they are considered the payer.[22] The formula then determines the costs of each child based on the level of the parents’ combined income, and then determines the annual rate of child support payable. A parent with more than 65 per cent care of the child is not liable to pay child support, even if the formula would otherwise determine this result.[23]

Generally, the assessment uses income information reported in the parent’s most recent tax return. Where a parent has not lodged a tax return, the Registrar can draw on other available income information—such as information from with the Department of Human Services relating to income support payments or information provided by the parents, government agencies, employers or other sources.[24] Annual rates payable under an assessment can be varied at any time to reflect changes in financial circumstances, care arrangements or other events. There are special rules around when more information on income or a recently lodged tax return can be used to affect a child support assessment.

Child support agreements

Child support agreements are agreements between parents on the amount of child support that is to be paid. An agreement must meet the requirements of the child support legislation and must include matters that can be dealt with in a child support agreement for the Registrar to accept it.[25]

From 1 July 2008 there are two types of child support agreements: binding agreements and limited agreements. Each party to a binding child support agreement must have received independent legal advice before entering the agreement and there is no requirement that an administrative child support assessment be in place prior to making or accepting a binding agreement.[26] Binding agreements cannot be varied—to be altered they must be terminated and new agreement made. Limited agreements do not require the parties to have received legal advice before entering into the agreement but an administrative assessment must be in place when an application for such an agreement is made.[27] The amount of child support in a limited agreement must be at least the amount that would otherwise be payable by the same parent under the administrative assessment. Limited agreements cannot be varied. To alter the agreement, it must be terminated and a new agreement made.

Court orders

The Family Law Act 1975 and child support legislation provide for courts to register agreements for child and spousal maintenance and for a range of orders relating to child support assessment including orders as to who should be assessed, to make changes to a child support assessment, to set aside or terminate an agreement, for certain arrears to be paid or for payees to refund money paid as child support where no liability existed.

House of Representatives committee report on child support

In June 2015, the House of Representatives Standing Committee on Social Policy and Legal Affairs chaired by George Christensen released the report, From conflict to cooperation: inquiry into the child support scheme.[28] The inquiry into the child support program commenced in March 2014 and had gathered the views of child support recipients, payers, stakeholder groups, legal experts and government agencies.

The Committee made 25 recommendations. The Government tabled its response on 31 August 2016, supporting some recommendations, supporting some in principle and not agreeing with others.[29] The only recommendation for which the Government committed to legislative amendments was Recommendation 22 (relating to the collection of overpayments), however it did state that it would ‘consider’ amendments in relation to some of the other recommendations.[30]

The following sections examine the issues examined by the Committee and its recommendations relevant to the measures proposed in Schedule 1.

Extending interim determination periods

Recommendation 8 of the Committee was:

that the Australian Government amend legislation to enable a greater period of time before determining when to adjust the amount of child support payable in interim care determinations. The Committee considers that the current fourteen week period, after which Department of Human Services changes the child support payable to reflect the care taking place at that time, does not provide sufficient time for relevant legal proceedings to be completed or for prior agreed arrangements to be enforced by a court or for revised arrangements to be agreed upon. The best interests of the child must be paramount in any amendment made.[31]

Interim care determinations can be made in situations where the percentage of care a person has of a child is disputed. Generally, the percentage of care (used in the child support assessment formula described above) is determined according to the amount of actual care a person has of a child. In some limited circumstances where the amount of care is disputed, the percentage of care may be determined according to a written agreement, parenting plan or court order for an interim period.[32] The parent with less care must take reasonable action to have that written care arrangement complied with, or seek a new care arrangement in order for the child support assessment to be based on the care arrangement for the interim period.[33]

Interim care determinations can be made in situations where a parent is being prevented from having a child in their care in accordance with a care arrangement without their consent, when they take reasonable steps to have the care arrangement (or a different care arrangement) complied with.[34] For such a determination to be considered by the Registrar, there must be a care arrangement in place and being followed at the time the care changed.[35] Where such a determination is made, child support will be assessed in accordance with the care arrangement for a period of up to 14 weeks, or up to 26 weeks in special circumstances. Special circumstances are those that are out of the ordinary and will affect the resolution of the dispute relating to care, such as one parent taking the child overseas without the consent of the other.[36]

Taking reasonable steps to ensure compliance with care arrangements could include actions such as genuine negotiations, making or attending an appointment at a Family Relationship Centre or other mediation service, seeking or obtaining legal advice, filing an application to a court to have an order made or enforced or notifying the police that the child has been taken without consent.[37]

The Committee heard criticism from contributors to the inquiry regarding an inability of the CSS to enforce care arrangements but noted that no ‘expert evidence’ supported changes to this particular arrangement.[38] The Committee was of the view enforcement of care agreements was a matter of family law. However, the Committee found:

... current arrangements for the assessment of care can fail to take account of the agreed care, and cause a parent to be assessed at a higher payment level despite a care agreement (and their desire to provide the agreed care). An interim determination may put a pause on any assessment changes whilst the care arrangements are resolved, enforced or modified in court. However, the fourteen week limit on interim determinations is not long enough in many cases, which may cause a parent’s child support liability to increase just as they attempt to enforce parenting orders through the courts. As a result, this time period should be abolished.[39]

The amendments proposed by Part 1 of Schedule 1 are intended to address Recommendation 8 and will allow for interim care determinations to be extended to a maximum period of 52 weeks where the disputed care change occurs within the first year of a court ordered care arrangement.[40] For older court orders, the interim care determination period would be able to be extended to up to 26 weeks if the person with increased care does not take reasonable action to participate in dispute resolution.

The former Minister for Social Services, Christian Porter, outlined the rationale for the proposed changes:

This extension of the interim period strengthens the incentive for parents to comply with court orders and appropriately discourages parents from withholding care of a child from another parent or carer where that particular care arrangement has been ordered by a court to be in the best interests of the child.[41]

The maximum 14-week interim care determination period will continue to apply in relation to care arrangements that take the form of care agreements or parenting plans, where the disputed care change occurs in the first year after the agreement or plan is made. Where the agreement or plan is older than a year, and the person with increased care participated in family dispute resolution, a shortened four-week interim period will apply.

The first component of these amendments, relating to court ordered arrangements, will allow more time for legal proceedings relating to a care dispute to be completed or progressed before child support is calculated based on actual care. All the amendments in this Part will provide a greater incentive for the parent with increased care to participate in mediation as to do otherwise will mean that child support and family assistance payment rates will continue to be calculated based on the care percentages set out in the agreement for a significant period of time.

Tax assessments

The assessment of income used in the child support formula is based on adjusted taxable income. Adjusted taxable income is: taxable income for the last relevant year of income, reportable fringe benefits, target foreign income, total net investment losses, any tax free pensions or benefits and any reportable superannuation contributions.[42] Where possible, the assessment of taxable income will be based on a parent’s tax assessment for the relevant income year.

Currently, where a parent’s tax assessment is amended after it has been used in an administrative child support assessment, the Registrar is only able to amend the child support assessment to take account of the changed tax assessment in specific situations:

  • where the tax assessment is amended due to fraud or tax evasion
  • where the tax assessment is amended under provisions of an Income Tax Assessment Act that are prescribed by child support regulations for the purposes of allowing the Registrar to take account of an amended assessment or
  • in certain situations where a parent’s tax assessment is nil and the parent does not have any additional components of adjusted taxable income.[43]

The Committee stated in its report that it was ‘concerned’ about the impact the rules around the Registrar’s ability to amend a child support assessment when there was an error made in the tax assessment by the Australian Tax Office.[44] The Committee did not recommend a specific change, only that the Government should ‘consider matters pertaining to’ the amendment of the Child Support (Assessment) Act 1989 to allow the Registrar to take into account amended tax assessments.[45]

In its response to the Committee report, the Government stated that it would consider amendments to this effect.[46] The amendments in Part 2 of Schedule 1 will allow for amended tax assessments to be taken into account in a broader range of circumstances. The Minister stated in his second reading speech that the amendments were ‘in line’ with the recommendation of the Committee report.[47]

Setting aside child support agreements

As noted above, since 1 July 2008 there have been two types of child support agreements: binding and limited. Agreements that were made and accepted by the Registrar prior to 1 July 2008, and which continued to have effect after this date, are considered under the legislation as a special type of binding agreement known as a transitional child support agreement. Transitional agreements can be considered binding agreements even though they may not meet the post-1 July 2008 requirement for both parties to have received legal advice. Transitional agreements are subject to some different rules than agreements made after 1 July 2008, and there are different requirements for ending transitional agreements.[48]

Binding agreements can be terminated by:

  • a new binding child support agreement that includes a provision that terminates the previous agreement
  • a binding child support agreement to the effect that the previous agreement is terminated (a termination agreement) or
  • a court order setting aside the child support agreement.[49]

Transitional child support agreements can be terminated by one of the above methods or by an agreement in writing signed by both parties to the effect that the previous agreement is terminated.[50]

A court can set aside a binding agreement (including transitional agreements) following an application from one of the parties to the agreement in limited circumstances:

  • where the agreement of one of the parties was obtained by fraud, undue influence or unconscionable conduct or
  • another party to the agreement or someone acting for another party exerted undue influence or duress in obtaining agreement, or engaged in unconscionable or other conduct to such an extent that it would be unjust not to set aside the agreement or
  • there are exceptional circumstances which have arisen since the agreement was made that means a party to the agreement or the relevant child will suffer hardship if the agreement is not set aside.[51]

The Committee heard from some submitters who raised concerns that despite transitional agreements being made under different legislative arrangements, including the absence of a requirement that the parties receive legal advice, there are no provisions for transitional agreements to be treated differently by the court.[52] Other submissions raised issue with how difficult it was for one party to have any binding child support agreement set aside. The Family Law Section of the Law Council of Australia stated in its submission that:

All of the reported decisions of the Family Courts (that is, the Family Court of Australia and the Federal Circuit Court of Australia) illustrate that setting aside such Agreements requires an applicant to jump a very high hurdle. There is a need to establish “exceptional circumstances” and consequential “hardship” if the Agreement is not set aside.[53]

The Committee did not recommend a specific change, only that the Government should ‘consider matters pertaining to’ the ‘hurdle for courts to set aside Child Support Agreements made before 1 July 2008, and to set aside all Binding Child Support agreements’.[54]

The Government’s response to the report stated that it ‘continues to monitor the effect of child support legislation and acknowledges that legislative clarification can help to ensure consistent equitable outcomes for separated families’ but it did not commit to any specific changes.[55]

In his second reading speech to the Bill, the Minister for Social Services, Christian Porter, stated the amendments proposed in Part 3 of Schedule 1 were in response to the Committee’s recommendation.[56] The amendments will introduce a separate and less restrictive test for courts to set aside child support agreements entered into prior to 1 July 2008 where neither of the parties obtained legal advice; and, allow for all child support agreements to be set aside without having to go to court if the person who is entitled to child support under the agreement ceases to be an eligible carer of the child.

Collection of overpayments

Recommendation 22 was:

The Committee recommends that the Australian Government ensure equity in the collection of child support debts and of overpayments, in particular that the same flexibility that applies to the collection of overpayments is applied to the collection of debts, especially where the debts were unintended. In implementing this recommendation the Government should at all times take into account the best interests of the child.[57]

In explaining the reason for this recommendation, the Committee stated that it:

... is also concerned about statements made during the inquiry that suggested that child support debts by payers due to underpayments or non-payment were always followed up whereas child support debts by recipients due to overpayments being made were almost never followed up. The Committee recommends that the Australian Government ensure that the collection of debts relating to overpayments is given equivalent treatment to instances where underpayments are made.[58]

The Committee report did not discuss this issue, did not cite who had made the statements, did not state the view of the Department of Human Services on this issue, nor was any data presented showing the extent of this problem.

In their joint submission to the inquiry, the Department of Social Services and the Department of Human Services stated that ‘most payee overpayments are treated as debts to the Commonwealth under section 79 of the Registration and Collection Act and are recovered by DHS from the payee. Where overpayments do not fall within section 79, the payer may pursue recovery in court under section 143 of the Assessment Act’.[59] The submission noted that payee overpayments can be recovered by withholding amounts from ongoing child support entitlements, negotiating a payment arrangement with the payee, or intercepting the payee’s tax refund.[60]

National Legal Aid stated in its submission to the inquiry that:

A significant number of overpayments to payees are caused by factors outside the control of the payee, for example, late lodgement of tax returns on the part of a payer. Where reduction of overpayments is implemented by Child Support, [state and territory legal aid] commission experience is that the overpayment can result in the immediate cessation of child support until the overpayment is absorbed (and Child Support may also take other action, for example intercepting payee's tax refunds). This can cause considerable and unexpected hardship for a payee with the care of children. Some parents may not be aware of alternative options (e.g. payment plan) or have limited capacity to negotiate a preferred overpayment option.[61]

The Government’s response to the recommendation stated that it would:

... introduce amendments to the child support legislation to provide for broader powers to administratively collect child support overpayments in a wider range of circumstances. This will provide greater equity in the collection of child support and child support overpayments.[62]

The Minister for Social Services stated that the measures in Part 4 of Schedule 1 of the Bill are in response to Recommendation 22.[63] The measures will align recovery methods available to the Registrar for overpayments to child support payees with the current methods available for recovering debts from payers—including the use of departure prohibition orders preventing overseas travel.

Policy position of non-government parties/independents

At the time of writing, non-government parties or independents have not publicly expressed a policy position on the amendments in Schedule 1.

Position of major interest groups

At the time of writing, no major interest group has publicly expressed a position on the amendments in Schedule 1.

Financial implications

According to the Explanatory Memorandum to the Bill, the amendments in Schedule 1 will cost $12 million over the forward estimates.[64]

Key issues and provisions

Part 1—Interim care determination periods

Part 1 of Schedule 1 will amend the FA Act and the CSA Act to:

  • allow for interim care determinations to be extended to a maximum period of 52 weeks where the disputed care change occurs within the first year of a court ordered care arrangement
  • in the case of older court orders, allow for interim care determinations to be extended to up to 26 weeks if the person with increased care does not take reasonable action to participate in dispute resolution
  • maintain the maximum 14-week interim care determination period for care arrangements that take the form of care agreements or parenting plans, where the disputed care change occurs in the first year after the agreement or plan is made and
  • apply a shortened maximum interim care determination period where the agreement or plan is older than a year, and the person with increased care continuously takes reasonable action to participate in family dispute resolution.

The amendments are to commence on the day after Royal Assent.[65]

As discussed above in the Background section, interim care determinations can only be made in limited circumstances where the amount of care being provided is in dispute (often in cases where one parent is being denied access or the agreed amount of care). For an interim care determination to be made by the Registrar (or the Secretary responsible for Family Tax Benefit—the Secretary of the Department of Social Services), the parent with less care of the child must take reasonable action to have the existing care arrangement (established in a written agreement, parenting plan or court order) complied with, or seek a new care arrangement.

Currently, in special circumstances such as family violence or unreasonable or unusual behaviour by the person with reduced care, the Secretary or the Registrar has the discretion to decide that no interim period will apply.[66] In such situations, the percentage of care used to calculate Family Tax Benefit or child support will be immediately based on actual care. This discretionary power is not affected by the amendments.

Allowing for longer interim care determinations in the case of new court ordered care arrangements will provide more time for dispute resolution processes or legal proceedings relating to the enforcement of these care arrangements to conclude. In the case of older court-ordered arrangements, the possibility of a 26-week interim care determination being made will act as an incentive for the higher-care parent to engage in dispute resolution (or face up to six months wait before they will have their child support and family assistance entitlements based on the actual care-amount they have of the child).

The other amendments, affecting those with care agreements or parenting plans rather than court ordered care arrangements, will also offer an incentive for the parent with increased care to engage in dispute resolution.

In its submission to the House of Representatives Social Policy and Legal Affairs Committee inquiry, the Attorney-General’s Department stated:

The Department notes that it may be difficult for parents to seek a resolution through the family law system within this timeframe [the 14 week interim care period]. Information provided by the Department of Social Services for the period 1 July 2013 to 31 March 2014 indicates that the average time between contacting a Family Relationship Centre and the first FDR session is approximately 12 weeks. The Federal Circuit Court sets a target of finalising 90% of cases within 12 months and the Family Court of Australia sets a target of finalising 75% of cases within 12 months.[67]

Given the long timeframes involved in both court and dispute resolution proceedings, allowing for longer interim care determinations will mean that the parent with lower care, who is attempting to have a care arrangement complied with, will not have their child support or family assistance payments adjusted early in the court or dispute resolution process.

Key provisions

Item 4 inserts a new definition of maximum interim period at subsection 3(1) of the FA Act for interim care determinations made under section 35A or 35B. The maximum interim period is the period beginning on the day the care changed so that it ceased to correspond with the individual’s percentage of care (as determined for subsection 35C(4)) or their extent of care under a care arrangement and ending:

  • for an interim care determination relating to a court order:
    • the end of the period of 52 weeks starting the day the court order first takes effect or
    • the end of the period of 26 weeks starting on the change of care day or
  • for an interim care determination relating to a written agreement or parenting plan—the end of the period of 14 weeks starting on the change of care day.

Item 4 also moves the definition of percentage range from subsection 35P(2) so that it is included in the definitions at subsection 3(1).

Section 35C of the FA Act requires the Secretary of the Department of Social Services to determine percentages of care in certain circumstances where the Secretary is satisfied that the actual care of a child that an adult has had or will have does not comply with the extent of care of the child that the adult should have under a care arrangement (that is, for the purposes of an interim care determination for payment of Family Tax Benefit). Item 10 amends paragraph 35C(1)(c) to replace the words ‘has taken’ with the words ‘is taking’. The amendments will mean that a person with reduced care of a child would need to be currently undertaking reasonable action to ensure compliance with a care arrangement rather than having taken reasonable action at some point.

Section 35D of the FA Act provides for the Secretary to determine a percentage of care in a disputed care situation (for an interim care determination under sections 35A or 35B) where the individual with reduced care is taking reasonable action to make another care arrangement under which the individual would have more than the actual care of the child but less than the care the individual should have under the current arrangement. Item 11 repeals section 35D. According to the Explanatory Memorandum to the Bill, the section is:

... not consistent with the amendments in this Part, which seek to ensure that care arrangements are complied with ... It is not appropriate for the care arrangement to be reflected in a situation where both parties are seeking a different level of care. In such situations, it is more appropriate for actual extent of care to be reflected.[68]

The effect of the repeal of this section is that interim care determinations will be made in situations where the parent with reduced care is taking reasonable action to have a care arrangement complied but will no longer apply in situations where the parent is seeking to make a new care arrangement.

Section 35F currently sets out circumstances where sections 35C and 35D do not apply, including the 14-week interim care determination period. Item 14 repeals and substitutes section 35F and adds new section 35FA. New section 35F will set out circumstances where section 35C does not apply and will introduce the new concept of a ‘maximum interim period’ which will vary depending on the circumstances of the care arrangement. New section 35F will prevent section 35C determinations from applying to:

  • past payment periods that commenced after the end of the maximum interim period
  • payment claim days after the end of the maximum interim period
  • care percentage determinations that have been revoked under section 35P or 35Q or
  • where a later care percentage determination has been made after the end of a maximum interim period for an earlier section 35C determination which relates to the same care arrangement.

Proposed section 35FA provides the definition of interim period. The definition includes a table at subsection 35FA(1) setting out the time period for interim care determinations based on the applicable circumstances. As described above, interim care periods in relation to court ordered care arrangements will be:

  • up to 52 weeks where the disputed care change occurs within 52 weeks of the court order
  • up to 26 weeks for older court orders if the individual with increased care does not continuously take reasonable action to participate in family dispute resolution or
  • a minimum of 14 weeks for older court orders where the individual with increased care continuously takes reasonable action to participate in family dispute resolution.[69]

For care arrangements set out in written agreements or parenting plans, the maximum interim period will continue to be 14 weeks. However, this can be reduced to a minimum of four weeks if the disputed care change occurs after the first year of the agreement or plan and the individual with increased care continuously takes reasonable action to participate in family dispute resolution.

Where special circumstances exist in relation to a child who is the subject of the disputed care arrangement, then the Secretary is to determine the day the interim period ends (being a day before the day the period would otherwise end if the special circumstances did not exist). Special circumstances are unusual, uncommon or exceptional and need to be different from the usual run of child support cases.[70]

Under proposed subsection 35FA(2), in some circumstances, if an interim period ends before the end of the maximum interim period for the determination then a further interim period can apply. This can occur where the person with reduced care is taking reasonable action to ensure compliance with the care arrangement but the person with increased care ceases to take reasonable action to participate in dispute resolution. The further interim period for the determination begins on the day the person with increased care ceased taking reasonable action.

Items 22–38 amend the CSA Act to provide for similar amendments as were made to the FA Act. The amendments to the CSA Act introduce new maximum interim periods for interim care determinations for the purposes of calculating child support, with different periods applicable depending on the kind of care arrangement, how long the care arrangement has been in place, and whether the parent with increased care is participating in family dispute resolution.

Part 2—Amended tax assessments

Part 2 of Schedule 1 will amend the CSA Act to allow for amended tax assessments to be taken into account in amending a child support assessment in a broader range of circumstances. The amendments are to commence on the day after Royal Assent.

As discussed in the Background section above, where a parent’s tax assessment is amended after it has been used in an administrative child support assessment, the Registrar is currently only able to amend the child support assessment to take account of the changed tax assessment in specific situations:

  • where the tax assessment is amended due to fraud or tax evasion
  • where the tax assessment is amended under provisions of an Income Tax Assessment Act that are prescribed by child support regulations for the purposes of allowing the Registrar to take account of an amended assessment or
  • in certain situations where a parent’s tax assessment is nil and the parent does not have any additional components of adjusted taxable income.[71]

Under the amendments, these limitations will be removed. However, some conditions will apply in relation to the Registrar using an amended tax assessment retrospectively. If an amended tax assessment results in a higher adjusted taxable income than was previously used in an administrative child support assessment, then any amended child support assessment must be on the basis that the income for that year of income is, and always has been the amount worked out as a result of the amended tax assessment. Similarly, where a parent applies for an amended tax assessment on or before:

  • the day they were required to lodge their income tax return
  • the end of 28 days after they were provided with the assessment or
  • the end of 28 days after they become aware that the assessment is not correct (if the parent did not apply for an amendment within the former timeframes because of circumstances beyond their control)

then any amended child support assessment must be on the basis that the income for that year of income is, and always has been, the amount worked out as a result of the amended tax assessment. Where the parent did not apply for the amended assessment within one of the timeframes listed above, but the Registrar considers that special circumstances exist, then the amended tax assessment can be used to assess income retrospectively for child support assessments.

Where any of the above conditions are not applicable (that is, resulting in a higher adjusted taxable income, where the amended tax assessment is applied for within certain timeframes, or where special circumstances exist) then amended tax assessments should only be used for amending child support assessments for later days in the child support period. That is, the revised income assessment would only be used prospectively in cases where the conditions are not met.

Key provisions

Item 40 repeals and substitutes proposed subsection 56(2) of the CSA Act to set out the conditions under which an amended tax assessment can be taken into account for the purposes of determining a parent’s taxable income. The conditions are described above.

Item 42 repeals and substitutes proposed subsection 57(7) of the CSA Act so that an amended tax assessment which results in a taxable income that is higher than nil must be used to amend a child support assessment that was previously made in regards to a parent who had recorded nil taxable income. The administrative child support assessment must be amended by the Registrar on the basis that the parent’s adjusted taxable income for that year of income is and always has been the amount worked out as a result of the amended tax assessment.

Item 43 inserts proposed subsections 58A(3A)–(3F) into the CSA Act to set out the conditions under which an amended tax assessment can be taken into account for the purposes of determining a parent’s taxable income in situations where the Registrar has previously made a determination (under section 58) of the parent’s adjusted taxable income because no tax assessment had been made or the Registrar was unable to ascertain whether or not a tax assessment had been made. The conditions are substantially the same as those set out in proposed subsection 56(2) inserted by item 40 and explained above.

Part 3—Child support agreements

Part 3 of Schedule 1 will amend the CSA Act to limit the ability of payees to terminate child support agreements or seek to apply the administrative child support formula instead of the child support liability under an agreement; to allow for child support agreements to be set aside or suspended where certain circumstances change, particularly where the payee parent ceases to be an eligible carer for a child; and to allow courts to set aside transitional child support agreements (those made prior to 1 July 2008) where neither party obtained legal advice prior to entering the agreement.

The amendments relating to transitional child support agreements derive from a recommendation of the House of Representatives Committee report (see Background section) but it is unclear what the bases for the other amendments are.

The Statement of Compatibility with Human Rights suggests that the amendments allowing for a child support agreement to be set aside or suspended when the payee parent ceases to be an eligible carer for a child ‘will avoid the need for parents to apply to a court to set aside a child support agreement where that has been eligible carer “role swap”’.[72] This will make it easier for agreements to be set aside or temporarily suspended (allowing for the child support formula to be applied taking account of actual care arrangements). However, it is unclear whether this is a significant issue for many families.

Key provisions

Item 45 adds proposed subsection 12(6) to the CSA Act to provide that references in child support agreements to a ‘child support terminating event’ under the CSA Act are not taken to include reference to a ‘child support terminating event’ under subparagraph 12(4)(a)(i). A child support terminating event occurs under subparagraph 12(4)(a)(i) if a child support recipient elects  that the liability of the payer parent will end (the Registrar must be given notice by the payee parent and in some circumstances the Secretary of the Department of Social Services must approve the election).

The Explanatory Memorandum states that the item 45 amendment ‘is to ensure that a child support agreement cannot enable a termination of the agreement via a unilateral election by a payee under section 151 to end the administrative assessment’.[73] It is unclear from the Explanatory Memorandum or from any other supporting materials whether this has been a significant issue for child support agreements.

Section 142 of the CSA Act sets out circumstances where orders under the Act will cease to be in force. Circumstances include:

  • where a child support terminating event happens in relation to the child
  • where a child support terminating event happens in relation to a carer entitled to child support, a liable parent, or to both parents and the child
  • where the person who applied for the order dies or ceases to be an eligible carer and
  • where the person against whom the order was made dies or ceases to be a resident of Australia.

Item 47 inserts a reference to section 142 in subsection 95(2) so that certain provisions of a child support agreement accepted by the Registrar have effect for the purposes of section 142 as if they were an order made by a court (under Division 4 of Part 7 – Orders for departure from administrative assessment in special circumstances (departure orders)).

Item 48 adds proposed subsection 131(5) to the CSA Act to allow a court to vary or revoke an order made under section 131 if the order was made because another order ceased to be in force under section 142 and then subsequently revives because of proposed subsections 142(1B) and (1C) inserted by item 49. The proposed subsections inserted by item 49 will revive an order that was ended under section 142 because of a child support terminating event under subsection 12(4)(a)(i) as a result of an election under section 151 to end an administrative assessment and:

  • the liability to pay or provide child support is under a child support agreement covered by subsection 95(2) or (3) and
  • the person who made the election applies for an administrative assessment before the liability under the agreement ends.

The amendments will mean that where a payee under a child support agreement seeks to end a child support assessment based on that agreement and then apply for a new assessment based on the child support formula, the new assessment will still be based on the agreement until any liability under the agreement would have ended. Again, it is unclear from the supporting materials whether this kind of action by a payee has been a significant issue or problem.

Item 54 adds proposed paragraph 80D(1)(d) to the CSA Act to allow a binding child support agreement to be terminated under proposed subsection 80D(2A), which is inserted by item 56. Proposed subsection 80D(2A) sets out the conditions for a binding child support agreement to be terminated when a payee ceases to be an eligible carer for a child and does not recommence being an eligible carer within 28 days. This will mean that a payer parent will no longer have to apply to a court to set aside an agreement in order to remove their child support liability in situations where the payee parent has ceased to be a carer for the child. The agreement may continue in relation to other children to whom the agreement relates, where the payee parent does not cease to be an eligible carer of those children.

Item 58 adds proposed paragraph 80G(1)(f) to allow for a limited child support agreement to be terminated under proposed subsection 80G(1B), which is inserted by item 60. Proposed subsection 80G(1B) sets out the conditions for a limited child support agreement to be terminated where a payee ceases to be an eligible carer for a child and does not recommence being an eligible carer within 28 days.

Item 64 inserts proposed section 85 to preclude agreements that provide for child support to be payed or provided to a party for a period during which the party is not an eligible carer of a child, from being child support agreements.

Item 64 also inserts proposed Division 2A of Part 6, to contain proposed sections 86 and 86A and current section 87. Proposed section 86 provides for child support agreements to be suspended if the payee is not an eligible carer of the child, the period that they are not a carer is 28 days or less (or 26 weeks or less in certain circumstances) and a child support terminating event under subsection 12(2AAA) does not occur.

Proposed section 86A provides that where a child support agreement covers two or more children but does not explicitly provide (and it is not possible to work out) the amount of child support payable in relation to each child, then the agreement is taken to provide that the total amount payable is to be divided by the number of children to whom the agreement relates. This would appear to be a simplistic way of working out amounts of child support for multiple-children families, given that the formula used in administrative assessments sets different costs for children of different ages.[74]

Item 68 inserts proposed subsection 136(2A) which will allow a court to set aside child support agreements made before 1 July 2008 (transitional binding agreements) where the agreement was made without at least one of the parties to the agreement receiving independent legal advice before entering the agreement and the court is satisfied it would be ‘unjust and inequitable if the court does not set the agreement aside’. As noted above, the court can only set aside binding child support agreements in a limited range of circumstances:

  • where the agreement of one of the parties was obtained by fraud, undue influence or unconscionable conduct or
  • another part to the agreement or someone acting for another party exerted undue influence or duress in obtaining agreement, or engaged in unconscionable or other conduct to such an extent that it would be unjust not to set aside the agreement or
  • there are exceptional circumstances which have arisen since the agreement was made that means a party to the agreement or the relevant child will suffer hardship if the agreement is not set aside.

The amendments will allow transitional binding agreements to be set aside in an additional circumstance: where the agreement was made without at least one party to the agreement receiving legal advice before entering the agreement.

Part 4—Child support overpayments

Part 4 of Schedule 1 will amend the FA (Admin) Act, the CSA Act and the CSRC Act to:

  • align recovery methods available to the Registrar for overpayments to child support payees with the current methods available for recovering debts from payers, including through employer withholding of wages or salaries and the use of departure prohibition orders preventing overseas travel
  • expand the basis upon which overpayments are recoverable by DHS to allow for all backdated reductions to a child support assessment to be recoverable and
  • introduce new backdating provisions for retrospectively creating child support overpayments or underpayments due to a change of circumstances.

The most significant measure is the alignment of recovery methods available to the Registrar for overpayments to child support payees. Currently, such overpayments are generally treated as debts to the Commonwealth under section 79 of the CSRC Act and are recovered by DHS from the payee through the withholding of child support payments, negotiated repayment arrangements or by intercepting any tax refunds. Overpayments that do not fall within section 79 may be recovered by the payer in court under section 143 of the CSA Act.[75] The proposed amendments will generally treat debts arising from overpayments, known as carer debts, in the same way as child support debts with a wide variety of methods open to DHS to recover the debt including the withholding of social security, family assistance or veterans’ payments, offsetting other debt payments against the carer debt, court orders to prevent certain transactions from taking place or for the proceeds of certain transactions to be used to pay a carer debt, and the use of departure prohibition orders to prevent overseas travel. Employer withholding of wages or salaries may also apply in certain cases where a person has a carer debt, but only in situations where the person is also a payer of an ongoing child support liability.

The Minister for Social Services stated that the measures in Part 4 of Schedule 1 of the Bill are in response to Recommendation 22 of the House of Representatives Committee report.[76] Recommendation 22 was:

The Committee recommends that the Australian Government ensure equity in the collection of child support debts and of overpayments, in particular that the same flexibility that applies to the collection of overpayments is applied to the collection of debts, especially where the debts were unintended. In implementing this recommendation the Government should at all times take into account the best interests of the child.[77]

As noted in the Background section above, the Committee had stated that it was concerned by statements made during the inquiry suggesting that child support overpayments were almost never followed up.[78]

There is no data available showing how many payees receive overpayments, nor data on whether or not these overpayments are recovered.

National Legal Aid raised concerns that the existing arrangements for the collection of overpayments, particularly through the withholding of child support payments, can cause significant hardships and such overpayments are often not the fault of the payee. [79]

While the proposed measures will treat child support debts and debts arising from overpayments in a similar way for collection purposes, the Government has not provided evidence that the debts are of a similar nature, that the collection of these debts is problematic, or that punitive collection methods such as the withholding of social security or family assistance payments and/or departure prohibition orders are therefore justified.

Key provisions

Item 78 repeals and substitutes subsection 143(1) of the CSA Act so that child support overpayments are not amounts that can be recovered from a payee in a court in situations where:

  • the payer was no longer liable to pay child support
  • continued to pay child support
  • had ceased to be a resident of Australia or a reciprocating jurisdiction and
  • had delayed notifying DHS of the change.

This is to prevent recovery of overpayments created in situations where the payer had failed to notify DHS of their change of residency. Proposed paragraph 143(1)(b) will also allow for applications for a court recovery order for overpayments of child support for registered maintenance liabilities. This will extend the court recovery order provisions to child support liabilities which originated outside the CSA Act (but which are still recoverable under the CSRC Act).

Item 83 adds a number of new definitions to the list of definitions at subsection 4(1) of the CSRC Act relating to debts raised against payees for overpayments of child support. The new terms include: carer debt, carer liability, child support related debt, and deductible liability. Items 84–87 also amend subsection 4(1) to include references to these new terms under other relevant definitions.

Item 92 repeals and substitutes proposed section 43 to expand the range of amounts that can be collected from someone with an enforceable maintenance liability via the garnisheeing of an employee’s salary or wages to include liabilities to pay a child support debt and a carer liability. Currently, the provision only provides for the collection of amounts due in relation to the enforceable maintenance liability, not debts or overpayments to a payee. Under proposed subsection 43(3), the provision will not apply if the Child Support Register indicates that an election has been made under section 44 that employer withholding does not apply in relation to the liability.

Section 44 sets out situations where employer withholding of a person’s salary or wages does not apply. Subsection 44(1) provides that if the person with the enforceable maintenance liability elects that employer withholding is not to apply in relation to that liability and the Registrar is satisfied that the person is likely to make timely payments under the liability, the Registrar must, within 28 days of receiving the election, ensure that the Child Support Register contains a statement that employer withholding does not apply in relation to that liability. Subsections 44(5) and 44(7) provide for automatic employer withholding to apply where the Registrar had previously included such a statement in the Register but the payer has failed to make timely payments in regards to the enforceable maintenance liability. Items 93 and 95 repeal and substitute those two respective subsections to expand the application of automatic employer withholding to situations where the payer has failed to make timely payments in regards to the enforceable maintenance liability or any other deductible liability.

Item 101 inserts proposed section 69B of the CSRC Act to provide for the repayment of overpayments made to a payee of a registered maintenance liability. The proposed section will replace section 79 (repealed by item 160) which currently provides for certain overpayments to be considered debts due to the Commonwealth and repayable to the Registrar, and for those debts to be recovered through reducing any further child support payments payable to the payee. The proposed section provides for debts arising from overpayments to be considered a carer liability and for the payee repaying the amount to be considered the payer of a carer debt.

Proposed section 69B is different from current section 79 in that an amount is not repayable, and does not become a debt due, where:

  • the payee was not entitled to the amount because of a subsequent variation to particulars of the entry in the Child Support Register in relation to the registered maintenance liability and
  • the payer of the liability ceased to be a resident of Australia or a reciprocating jurisdiction.

The proposed section explicitly states that any amount of carer liability repaid to the Registrar must be payed by the Registrar to the payer of the registered maintenance liability. Proposed subsection 69(B)(4) states that the payee of the carer liability is not entitled to and may not enforce payments of amounts payable under the liability other than by instituting court proceedings under section 113A.[80]

Item 104 repeals and substitutes proposed subsection 71(1) to enable direct payments of carer liabilities to the payee of the carer debt to be credited by the Registrar against the amount payable under the liability.

Item 106 repeals and substitutes proposed paragraphs 71AA(1)(a) to (c) to allow for different child support debts and/or carer debts to be offset against each other by the Registrar.

Item 108 inserts proposed section 71AB to allow for the Registrar to reduce child support debts or carer debts when other debt amounts are paid back through the Registrar. The section will allow the Registrar to credit certain amounts received as repayment for one debt against a debt owed by the person who would otherwise receive the repayment.

Item 109 repeals and substitutes proposed subsection 71A(1) to allow for certain payments to a third party to be credited against an enforceable maintenance liability or carer liability.

Items 110–159 amend various parts of the CSRC Act to extend to carer liabilities or child support-related debts the existing administrative and court recovery mechanisms that can be applied to child support debts. This includes:

  • the Registrar collecting debts from a third person
  • through deductions from social security pensions and benefits or family tax benefit payments (via a written notice to the Secretary of the Department of Social Services)
  • deductions from Paid Parental Leave Payments (via a written notice to the Secretary of the Department of Social Services)
  • deductions from veterans’ pensions and allowances (via a written notice to the Repatriation Commission)
  • court orders to prevent certain transactions which are being made to defeat a person’s liability or to direct the proceeds of such a transaction towards payment of a liability and
  • prohibiting overseas travel by a person with a liability or debt.

Items 172–173 are application provisions. The amendments in Part 4 relating to the collection of debts under the CSRC Act apply in relation to any liability to pay a debt that is payable after the commencement of the item, regardless of whether the debt arises before or after commencement. Proposed section 69B of the CSRC Act applies in relation to debts that arise after commencement. Debts arising from overpayments to a payee (provided for under current section 79 of the CSRC Act) that are due and payable immediately before commencement of Part 4 of the Schedule 1, are taken, after commencement, to have arisen under section 69B (so will be treated as carer liabilities). The amendments to the CSA Act in Part 4 of Schedule 1 apply to decisions made after the commencement of Part 4, and to findings by a court made after the commencement of Part 4.

Item 174 is an application provision relating to how child support assessments made prior to 1 July 2008 can be amended based on new information on a parent’s income.  It provides for subsection 58A(2) of the CSA Act to apply in relation to any day in a child support period (whether before, on or after 1 July 2008) in relation to which the Registrar makes a determination of a person’s adjusted taxable income or child support income after the commencement of Part 4 of Schedule 1 of the Bill, regardless of the application provisions of the Child Support Legislation Amendment (Reform of the Child Support Scheme—New Formula and Other Measures) Act 2006 (at item 115 of Schedule 2).

Section 58A provides for the amendment of a child support administrative assessment, which was based on a default or provisional income, where the Registrar subsequently ascertains a parent’s taxable income. Subsection 58A(2) provides for the amended child support assessment to apply retrospectively in situations where the parent could still lodge their tax return by the date requirement under Part IV of the Income Tax Assessment Act 1936 or, where the new assessed amount of income is higher than that previously used in the assessment. The application provisions of the Child Support Legislation Amendment (Reform of the Child Support Scheme—New Formula and Other Measures) Act 2006 limit the application of this subsection to child support assessments for periods after 1 July 2008. For assessments prior to this date, the previous rules apply which mean that the Registrar must automatically amend the assessment based on the newly ascertained taxable income or supplementary amount regardless of whether or not the new income amount is higher than the previously used income amount.[81] Item 174 will apply the current rules to all assessments, meaning that the Registrar would only amend pre-1 July 2008 assessments where the new income amount is higher than the previous amount.

Items 175–182 amend date of effect rules in the CSA Act, primarily to provide an incentive for parents to notify DHS of changes in care percentages or child support termination events in a timely fashion. The amendments will limit the backdating of beneficial child support payment amounts where the responsible parent has not notified DHS within a reasonable timeframe.

Schedule 2—Family tax benefit amendments

Background

Immunisation

Immunisation involves giving vaccines to people to protect against infectious diseases. The use of vaccines in Australia has greatly reduced infections and deaths from diseases such as diphtheria, whooping cough, tetanus, polio and measles. However, vaccine-preventable diseases can re-emerge in developed countries if vaccine coverage (the proportion of the population who have received the vaccination) falls below the level required for ‘herd immunity’.[82] Depending on both the vaccine and the particular disease, between 75 per cent and 94 per cent of a population may need to be vaccinated to stop diseases circulating and protect people such as newborns and those with suppressed immune systems. Measles and pertussis (whooping cough) in particular require coverage levels at the higher end of this range to prevent transmission. For these reasons, governments and health professionals work hard to maintain high rates of vaccine coverage in the population.[83]

National Immunisation Program

The Australian Government provides funding to the state and territory governments to purchase vaccines listed on the National Immunisation Program (NIP) Schedule, and also purchases some vaccines centrally for use by the states and territories.[84] The NIP Schedule currently includes 16 infectious diseases for which free vaccinations are provided to people in the specified age or risk groups.[85] This includes vaccines given to children at specified ages between birth and four years of age, vaccinations given to older children through school programs, and vaccinations for people aged 65 and over. The NIP Schedule also includes additional vaccines for people in at-risk groups such as Aboriginal and Torres Strait Islanders and pregnant women.[86]

‘No Jab, No Pay’ policy

A requirement for children to meet the NIP Schedule for childhood vaccinations (those usually given before five years of age) has been attached to child care payments since 1998 and for the FTB-A supplement from 2012.[87] In April 2015, the Government announced that it would close off conscientious objection and religious exemptions from the immunisation requirements for eligibility for the Family Tax Benefit Part A (FTB-A) supplement, Child Care Benefit (CCB) and Child Care Rebate (CCR).[88] The removal of these exemptions, and the new requirements for children of all ages to meet immunisation requirements for the FTB-A supplement, were included in the 2015–16 Budget as part of a package of measures aimed at boosting rates of immunisation.[89]

This ‘No Jab, No Pay’ policy commenced from 1 January 2016, and included free catch up vaccinations for older children who had not received all the required NIP childhood vaccinations.[90]

Immunisation rates under ‘No Jab, No Pay’

According to the Government, around 210,000 families have taken action to meet immunisation requirements since ‘No Jab, No Pay’ commenced in 1 January 2016.[91] This would include some families with older children who received catch up vaccinations.

The change in childhood vaccination rates since 2014 (prior to the announcement of the policy) can be seen in Table 3 below. The proportion of children fully immunised in the one and five year age groups rose in 2015 (possibly due to the announcement of the ‘No Jab, No Pay’ policy), and continued to rise following the commencement of the policy on 1 January 2016. Coverage rates in the two year old age group fluctuated, which may be due to the inclusion of new vaccines for this age group.

Table 3: proportion (%) of children fully immunised by age and year

  2014 2015 2016 2017
Aged 1 90.69 92.28 93.41 94.00
Aged 2 91.23 89.31 91.36 90.46
Aged 5 92.08 92.59 93.19 93.96

Source: DoH, Australian Immunisation Register data.[92]

Note: New vaccines were included in the definition of fully immunised for the two year old age group for the quarter ending December 2014, and again for the quarter ending March 2017. ‘The inclusion of these immunisations to the coverage calculation in December 2014 and March 2017 caused a drop in the 24-27 month coverage rates. The more antigens included in the assessment, the higher the likelihood of reduced coverage rates. This usually resolves over time as the changes become more routine’.[93]

The Government has described the increase in vaccination coverage as ‘encouraging’, but noted that ‘coverage for all children falls short of the 95 per cent minimum herd immunity required to slow or stop the spread of disease’.[94]

Immunisation coverage rates are not uniform across Australia. Areas with low vaccination rates may be at risk of disease outbreaks. 2015–16 was the first year in which all 31 Primary Health Network areas recorded immunisation rates above 90 per cent for five year olds. However, the proportion of five year olds who were fully immunised ranged from a low of 70.5 per cent in the inner Sydney postcode of 2000 to a high of 99.5 per cent in the Wollongong (NSW) postcode of 2517.[95]

The above data suggest that childhood immunisation rates have increased since ‘No Jab, No Pay’ was announced. This may be due to the success of the policy, but it is important to note that other immunisation initiatives have also been occurring in this period. For example, from 1 January 2016 the Australian Government introduced an additional $6 incentive payment ‘to vaccination providers who follow up and vaccinate children under 7 years of age who are more than 2 months overdue for their childhood vaccinations.’[96] This payment has reportedly been claimed 143,263 times between January 2016 and the end of May 2017.[97] States and territories have also been actively encouraging childhood vaccination, including through tightening immunisation requirements for access to child care services in New South Wales, Queensland and Victoria.[98]

The Australian Medical Association (AMA) has described ‘No Jab, No Pay’ as a success. AMA President Michael Gannon stated in May 2017:

There’s another 200,000 kids that are protected as individuals, and that, in an exponential way, increases the protection afforded to other children in playgroups and schools from serious infectious disease.[99]

However, researchers from the National Centre for Immunisation Research & Surveillance (NCIRS) and the University of Sydney believe that the ‘jury is out’ on the success of the policy. They contend that ‘No Jab, No Pay’ may not be a proportionate response to the small number of vaccine-refusing parents, in the context of relatively high childhood immunisation rates:

... unlike in the 1990s when the Immunise Australia Program was introduced, vaccination rates in Australian children are relatively high and at least comparable with similar developed countries. Vaccine refusal is only one of a range of factors relevant to further improvements in vaccine coverage and disease control. The greatest yield is likely to come from first implementing measures already shown to be effective in improving accessibility and minimising logistic barriers to vaccination, and second, from well structured research and evaluation of new interventions to overcome vaccine refusal and hesitancy.[100]

Number of people who lost eligibility for the FTB-A supplement

Minister for Social Services Christian Porter stated that as at 30 June 2017, families responsible for around 137,000 children lost all or some of their FTB-A supplement because they did not meet the full-year immunisation requirements.[101]

It is not clear if this is an increase or decrease in the number of families affected by the immunisation requirements. The most recent published data on reconciled FTB-A recipients is for 2014–15 and shows the percentage of children who meet the immunisation requirements by age check point:

Table 4: percentage of Family Tax Benefit children meeting immunisation requirement

  2014–15 2013–14 2012–13
Children aged one in
entitlement year
97.7% 97.7%
(199,668)
97.0%
(199,877)
Children aged two in
entitlement year
97.9% 97.6%
(197,580)
97.0%
(197,735)
Children aged five in
entitlement year
98.3% 97.9%
(201,162)
97.1%
(203,615)

Sources: Department of Social Services (DSS), Annual report 2016–17, DSS, Canberra, 2017, p. 38; DSS, Annual report 2015–16, DSS, Canberra, 2016, p. 30.

Note: Data on number of children in 2014–15 not published.

Healthy Start for School policy

In 2011, a separate requirement was attached to eligibility for the FTB-A supplement for families also in receipt of an income support payment: completion of a health check for children aged 3–4 years of age. The health check is an assessment of a child’s physical health including their height, weight, hearing, sight and general wellbeing. The specific age and nature of the check differs by state and territory.[102]

The health check requirement applies where an individual or their partner is a parent of an FTB child, and where they or their partner receives an income support payment such as allowance or pension.[103] A recognised health check must be completed and Centrelink notified by the end of the first income year (financial year) after the income year in which the child turned four in order for the parent to be considered eligible for the FTB-A supplement for the income year the child turned four.[104] Some children who are taking or have already undertaken health assessments due to their particular circumstances, such as disability or medical condition, may be taken to have met the health check requirement.

Income limit placed on the FTB-A supplement

In September 2016, the Government and Opposition negotiated an FTB savings measure in order to secure passage of the Budget Savings (Omnibus) Bill 2016.[105] The measure saw families with adjusted taxable income of $80,000 or more per year ineligible to receive the FTB-A supplement from 1 July 2016. This income limit was separate to the existing income test on FTB-A which affects their overall rate of FTB-A, not just the supplement component.

As a result of this measure, the Government estimated that around 374,000 families with 810,000 children would be ineligible for the FTB-A supplement in 2016–17.[106] In 2014–15, there were 1.8 million families receiving FTB-A.[107] With around 20 per cent ineligible for the FTB-A supplement due to their income, this reduced the incentive effect of the immunisation requirement for higher income families.

2017–18 budget measure

In the 2017–18 Budget, the Government announced that it would extend the 2015–16 Budget’s No Jab, No Pay measure and reduce the fortnightly payments of FTB-A recipients whose children do not meet the immunisation requirements.[108] The measure would see around $28 withheld from a FTB-A recipient’s fortnightly rate for each child who does not meet the immunisation requirements and would commence from 1 July 2018.

The $28 reduction will also apply to FTB-A recipients who receive an income support payment (such as a pension or allowance), or whose partner receives an income support payment, and who do not meet the Healthy Start for School (HSS) requirements. The HSS requirements are for a health check to be carried out in the financial year of the payment recipient’s child turns four years old (or the financial year after they turn four) for the recipient to be eligible for the FTB-A end-of-year supplement.[109]

Minister for Social Services, Christian Porter, and Minister of Health and Sport, Greg Hunt, explained the rationales for the policy change in a joint media release:

Reducing fortnightly payments, rather than withholding the supplement at the end of the year as occurs at present, will serve as an ongoing and immediate incentive for parents to get their children immunised and will help ensure that more children and the wider community will be protected from preventable diseases like whooping cough.

...

The more immediate the financial impact, the more likely children will be vaccinated within optimum timeframes to ensure the most effective coverage against disease.

This change also means that parents earning over $80,000 in adjustable taxable income have the same incentive to immunise their children. These families no longer qualify for the FTB Part A supplement, which is paid after the financial year, so now don’t experience any payment reduction if they haven’t immunised their children. The new measure will ensure that all FTB families, irrespective of income, are treated the same. [110]

Policy position of non-government parties/independents

At the time of writing, non-government parties and independents had not stated their position on the Bill.

However, Pauline Hanson’s One Nation Party Senator Pauline Hanson has previously criticised the No Jab, No Pay policy, suggesting that linking vaccination with social security payments was a form of blackmail:

CASSIDY: How could they be better equipped than the medical people to make that kind of judgement? Vaccinations save lives, clearly save lives, if you are promoting an anti-vaccination campaign, they lost lives.

HANSON: Like all the drugs we have had over the years that have destroyed people's lives as well. Look, there is enough information out there. No-one is going to care any more about the child than the parents themselves. Make an informed decision. What I don't like about it is the blackmailing that's happening with the government. Don't do that to people. That's a dictatorship. I think people have a right to investigate themselves.[111]

Position of major interest groups

The Australian Council of Social Service (ACOSS) criticised the proposed measure. ACOSS stated while it strongly supports immunisation:

Well-known barriers to immunisation for lower-income and disadvantaged families will not be resolved by No Jab No Pay. Barriers include poor access to health care, language barriers for migrant families that make navigating a complex health system very difficult, and lack of transport options for some.

Immunisation experts argue that No Jab No Pay may be missing the mark when it comes to increasing immunisation rates.

...

The government’s No Jab No Pay policy, by definition, targets families on lower incomes who receive Family Tax Benefit.[112]

The National Social Security Rights Network (NSSRN) also raised some concerns with the detail of the measure, at the time it was announced in the Budget:

The detail of the further extension of the immunisation requirements for FTB-A needs careful consideration, given the more immediate impact of this measure on the regular fortnightly incomes of some families (rather than the end of year supplement withheld).

It is unclear whether the withheld payments will be later paid if the child meets immunisation requirements (or enters an approved catch-up schedule) but this should be the case.

The measure should also be supported by administrative processes within the Department of Human Services. Given the impact on fortnightly income, consideration should be given to targeted reminders and warnings for the most vulnerable families (especially those also receiving income support), such as targeted outbound calls which include assistance connecting with appropriate support services if necessary rather than simply standard letters.

The current exemptions also need review, including the range of exemptions which may be granted by the Secretary, to ensure they are appropriate given the more immediate impact of this measure on family income. Consideration needs to be given, for instance, to the impact on: carers who acquire care of children who do not meet immunisation requirements (such as grandparents, foster carers) or families unable to reasonably access vaccinations due to geographic location or other circumstances.[113]

The Australian Medical Association has stated that it supports the measures as it will result in increased numbers of vaccinations.[114] At the time of the Budget announcement, AMA President Michael Gannon stated that it was also important that information on immunisation is delivered to vaccine-hesitant families by doctors and nurses in a respectful and careful way: ‘there’s no doubt about the science, but it’s a case of taking people with us, not purely punitive measures’.[115]

Financial implications

According to the Explanatory Memorandum, Schedule 2 of the Bill is estimated to result in savings of $22.8 million over the forward estimates.[116] This is further to the $508.3 million in savings over five years from 2014–15 attached to the initial No Jab No Pay policy. The No Jab No Pay policy remains a significant savings measure for the Government.

Key issues and provisions

Schedule 2 proposes to modify the existing immunisation requirements attached to FTB-A so that rather than preventing payment of the end of financial year FTB-A supplement amount to those whose children do not meet the immunisations requirements, those who receive FTB-A in fortnightly instalments will face a reduction in the payment rate for the period their child fails to meet the requirements. The amount of the fortnightly reduction is roughly equivalent to the current FTB-A supplement rate divided by 26 (around $28.28). Families will have a grace period of 63 days to meet the requirements after receiving a notice from the Department of Human Services.

The purpose of the measure is to impose a more immediate penalty on those who fail to meet the requirements, and to ensure that those now ineligible for the FTB-A supplement as a result of the new $80,000 income limit are still subject to a penalty for failing to meet the immunisation requirements.[117]

Immunisation requirements have been attached to the FTB-A supplement since 2012, with the 2016 No Jab No Pay policy removing conscientious and religious objections as valid exemptions from the requirement. Other exemption criteria apply, and will continue to apply under the proposed amendments. These include circumstances where:

  • the child has a medical contraindication
  • the child has natural immunity
  • the child is a part of an approved vaccine study
  • the vaccine is temporarily unavailable
  • the child is vaccinated overseas or
  • the Secretary has determined that the child meets the immunisation requirements.[118]

Issues around conscientious objection, parental rights and consent were discussed in the Bills Digest for the Social Services Legislation Amendment (No Jab, No Pay) Bill 2015.[119]

Has the No Jab No Pay policy improved immunisation rates?

As noted in the background section, there has been a small improvement in immunisation rates since the No Jab No Pay policy was implemented. A decline in coverage rates for two year olds since 2014 has been linked with the introduction of new vaccines for this age-group.[120] Coverage rates for young children still remain below the 95 per cent levels required for herd immunity for some diseases.

No evaluation of the impact of the No Jab No Pay policy has been published to date and it is difficult to disassociate the impact of the financial penalty measures from other Australian Government immunisation measures implemented around the same time (such as incentive payments for vaccine provides who provide catch-up vaccinations for certain children), advertising campaigns and media coverage of the issue, and some state and territory governments implementing ‘no jab, no play’ policies to prevent non-vaccinated children from attending child care services.

A recently published study of 429 parents, their attitudes towards vaccination in Australia and the early impact of the No Jab No Pay policy found that 2.6 per cent of participants had immunised their children as a result of the policy. A further 1.2 per cent said that they were considering vaccination as a result of the legislative changes.[121] Conversely, 3.9 per cent stated that the legislation had had no effect and their child was not vaccinated, and 1.2 per cent said that it had made them less likely to vaccinate.[122] Of the participants in the study, 93.5 per cent reported that their youngest child’s vaccinations were up-to-date and there were no statistically significant differences regarding sociodemographics between those with up-to-date vaccinations and those without.[123] The authors raised concerns that a small number of parents cited the No Jab No Pay changes as reducing their likelihood to vaccinate:

This concerning finding suggests the legislative changes may be further deterring some parents from vaccinating their children. Reasons for this are unclear; however, this behaviour may relate to ideological conflict for parents who believe they have authority over their child’s health and for whom safety concerns are insurmountable.[124]

Previous research has shown that most parents of incompletely vaccinated children in Australia are not opposed to immunisation, that these parents were more likely to be socioeconomically disadvantaged and face particular barriers to access immunisation providers.[125] Researchers from the National Centre for Immunisation Research and Surveillance and the University of Sydney have raised concerns that the intent of the No Jab No Pay policy is misplaced as vaccine refusal is a less important factor in lower vaccine coverage than hesitancy and barriers to access, and because of limited evidence as to the effectiveness of financial sanctions:

Given the unique nature of these initiatives, and uncertainty about both their effectiveness in reducing disease transmission and potential for adverse impacts, it will be particularly important to carefully evaluate both No Jab, No Pay and No Jab, No Play. Evaluation should focus on identifying differential effects on vaccine uptake, as well as any unintended adverse consequences, among the three key groups (children of vaccine-refusing parents, vaccine-hesitant parents and parents affected by access or logistic issues).[126]

It is also unclear how effective the policy change has been in terms of encouraging parents who object to vaccination, or who are vaccine-hesitant, to vaccinate their child. Data on conscientious objectors is no longer collected as it is not a valid exemption criterion. As at December 2015, 1.34 per cent of children had a conscientious objection to immunisation recorded on the Australian Immunisation Register.[127]

Reductions in fortnightly payments will provide a more immediate incentive for FTB-recipient families to ensure their children are up to date with the relevant vaccination schedule. Such immediate incentives already apply to those families with younger children in child care (due to similar immunisation requirements applying to eligibility for child care fee assistance payments).[128]

Key provisions

Items 1 and 2 of Schedule 2 commence on the day after Royal Assent. The remaining items commence on Proclamation. However, if the remaining items do not commence within the period of 12 months beginning on the day of Royal Assent, they commence on the day after the end of that that period.

Section 6 of the FA Act sets out the immunisation requirements applicable to certain payments under the Act.

Item 1 adds proposed subsection 6(8) to provide for the Secretary of the Department of Social Services to determine the manner in which requests for exemptions from the requirements are made, and what information or documents may be required.

Item 4 repeals and substitutes proposed subsection 6(1)(b) so that the immunisation requirements are used to determine whether the new rate reduction provisions provided by item 5 apply (rather than the FTB-A supplement eligibility).

Item 5 repeals and substitutes proposed sections 61A and 61B, and adds proposed sections 61C and 61D.

Proposed section 61A provides for a reduction in the FTB rate paid for a child if the child does not meet the health check requirements before the day child turns five years of age, and at least one of their parents/carers is in receipt of an income support payment. The health check requirement is to be specified in a legislative instrument made under proposed subsection 61A(9).[129] Where an FTB child does not meet the health check requirement (and does not meet one of the exception criteria) before the child turns five years of age, the amount of FTB-A paid in respect of that child will be subject to a FTB child rate reduction period. This period will commence the day the child turns five or a later day determined by the Secretary and lasts for the number of days in the income year the child turned four where their parent/carer was entitled to FTB-A and they or their partner receive an income support payment. The rate reduction will be calculated under proposed subclause 7(2) or 26(3) of Schedule 1 of the FA Act (inserted by items 7 and 9).

Proposed section 61B provides for a FTB child rate reduction period to apply where an FTB child does not meet the immunisation requirements. The period will apply in situations where an FTB child does not meet the immunisation requirements set out in section 6 either on the day a claim is determined (if the claim is for a past period) or before the end of a grace period (63 days after the Secretary notifies the parent/carer that the child does not meet the immunisations requirements). For parents/carers who receive their FTB-A payment in instalments (rather than a lump-sum at the end of the financial year) the reduction period applies from the day the notice is given and ends on the day the child meets the immunisation requirements.

Proposed section 61C provides that an individual should still be considered to be entitled to FTB despite their rate being reduced to zero as a result of an FTB child rate reduction period.

Proposed section 61D provides for a rate reduction period to not apply in situations where the relevant FTB child dies.

In calculating FTB-A entitlements, two different income tests are generally applied with the one that provides the highest rate being used.[130] The tests are set out in Schedule 1 of the FA Act. The first test (Method 1) reduces the maximum rate of FTB-A by 20 cents for each dollar of adjusted taxable income above $52,706 (this amount is known as the lower income free area). The maximum fortnightly rate is currently $182.84 for each child aged 0–12 years and $237.86 for each eligible teenager.[131]

The second test (Method 2) reduces the base rate of FTB-A by 30 cents for each dollar above $94,316 (the higher income free area). The fortnightly base rate is $58.66 per fortnight.

Families with income under $80,000 per annum are eligible for the FTB-A supplement of $737.30 per annum per child. It is included in the rate calculation process but not paid until the end of the financial year.

The income test methods are applied in the following way:

  • families with income equal to, or below $52,706 receive the maximum rate of FTB-A
  • families whose income falls in the range of $52,706–$94,316 receive either the reduced rate worked out under Method 1 or the base rate of FTB-A, whichever is higher
  • families with income over $94,316 receive the rate worked out under Method 1 or Method 2, whichever is higher.

Item 7 adds proposed subclauses 7(2) and (3) to Schedule 1 which set out the rate reductions under Method 1 of the FTB-A income test applicable for those subject to an FTB child rate reduction period. During the period, the annual FTB child rate in relation to the child is reduced by $737.30 for each day in the rate reduction period. In situations where a child meets neither the health check nor the immunisation requirements, only one rate reduction amount applies. FTB-A rates are calculated at an annual rate based on annual family adjusted taxable income. Fortnightly instalment amounts are calculated by removing the FTB-A end-of-year supplement amount and calculating a daily rate multiplied by 14.[132] The daily rate reduction would be $2.02 and a fortnightly reduction would be $28.28.

Item 9 adds proposed subclauses 26(3) and (4) to Schedule 1 which set out the rate reductions under Method 2 of the FTB-A income test applicable to those subject to an FTB child rate reduction period. The reduction is the same as that proposed by item 7 under the Method 1 test.

Items 10–16 amend clause 2, subclause 3(1) and subclause 3(3) of Schedule 4 to provide for the indexation of the rate reduction amount applied to those subject to an FTB child rate reduction period. While the rate reduction amount of $737.30 will generally be indexed annually on 1 July of each year, item 16 amends subclause 3(3) so that the rate reduction amount will not be indexed on 1 July 2017 (already passed) and 1 July 2018. There is currently a two-year freeze on the indexation of FTB-A maximum rates and the next indexation of these rates will occur on 1 July 2019.[133]

 


[1].         Australian Government, Budget measures: budget paper no. 2: 2017–18, 2017, pp. 151, 157.

[2].         Senate Standing Committee for Selection of Bills, Report, 12, 2017, The Senate, Canberra, 19 October 2017, p. 4.

[3].         Senate Standing Committee for the Scrutiny of Bills, Scrutiny digest, 12, 2017, The Senate, 18 October 2017, pp. 27–9.

[4].         Departure prohibition orders issued by the Child Support Registrar prevent a person from leaving Australia without either discharging all debts or making satisfactory arrangements to do so. Australian Border Force Officers and members of the Australian Federal Police are authorised to prevent the overseas departure of a person subject to a departure prohibition order. Department of Social Services (DSS), ‘5.2.11 Departure prohibition orders’, Child support guide, version 4.29, DSS website, 14 August 2017.

[5].         Senate Standing Committee for the Scrutiny of Bills, Scrutiny digest, 12, 2017, The Senate, 18 October 2017, pp. 28–9.

[6].         Ibid., p. 29.

[7].         Senate Standing Committee for the Scrutiny of Bills, Scrutiny digest, 13, 2017, The Senate, 15 November 2017, p. 98.

[8].         Ibid., pp. 99–103.

[9].         Ibid., p. 105.

[10].      Ibid.

[11].      Senate Standing Committee for the Scrutiny of Bills, Scrutiny digest, 15, 2017, The Senate, 6 December 2017, p. 58.

[12].      Ibid., p. 59.

[13].      Explanatory Memorandum, Family Assistance and Child Support Legislation Amendment (Protecting Children) Bill 2017, Statement of Compatibility with Human Rights, p. 1.

[14].      Parliamentary Joint Committee on Human Rights, Eleventh report of the 45th Parliament, October 2017, p. 60. 

[15].      Department of Social Services (DSS), ‘1.1.1 The Child Support Scheme’, Child support guide, version 4.27, DSS website, 16 May 2016.

[16].      Ibid.

[17].      The amount of money transferred assumes that 100 per cent of private collection arrangements were collected. Department of Human Services (DHS), Annual report 2016–17, DHS, Canberra, p. 69.

[18].      Ibid.

[19].      Senate Community Affairs Committee, Answers to Questions on Notice, Social Services Portfolio, Additional Budget Estimates 2016–17, Question SQ17-000158.

[20].      Senate Community Affairs Committee, Answers to Questions on Notice, Social Services Portfolio, Additional Budget Estimates 2016–17, Question SQ17-000151.

[21].      Senate Community Affairs Committee, Answers to Questions on Notice, Social Services Portfolio, Additional Budget Estimates 2016–17, Questions SQ17-000163 and SQ17-000165.

[22].      DSS and DHS, Submission to House of Representatives Standing Committee on Social Policy and Legal Affairs, From conflict to cooperation: inquiry into the Child Support Program, [submission no. 99], July 2014, p. 11.

[23].      Ibid.

[24].      Ibid., p. 13.

[25].      DSS, ‘2.7.1 What is a child support agreement’, Child support guide, version 4.29, DSS website, 1 July 2016.

[26].      Ibid.

[27].      Ibid.

[28].      House of Representatives Standing Committee on Social Policy and Legal Affairs, From conflict to cooperation: inquiry into the Child Support Program, House of Representatives, Canberra, June 2015.

[29].      Australian Government, Australian Government response to the House of Representatives Standing Committee on Social Policy and Legal Affairs report: from conflict to cooperation – inquiry into the child support program, August 2016.

[30].      Ibid., p. 11.

[31].      House of Representatives Standing Committee on Social Policy and Legal Affairs, From conflict to cooperation: inquiry into the Child Support Program, op. cit., p. 89.

[32].      DSS, ‘2.2.4 Disputed care arrangements’, Child support guide, version 4.27, DSS website, 14 August 2017.

[33].      Ibid.

[34].      Ibid.

[35].      Ibid.

[36].      Ibid.

[37].      Ibid.

[38].      House of Representatives Standing Committee on Social Policy and Legal Affairs, From conflict to cooperation: inquiry into the Child Support Program, op. cit., p. 89.

[39].      Ibid.

[40].      C Porter, ‘Second reading speech: Family Assistance Legislation Amendment (Protecting Children) Bill 2017’, House of Representatives, Debates, 14 September 2017, p. 10416.

[41].      Ibid.

[42].      DSS, ‘2.4.4.10 Adjusted taxable income’, Child support guide, version 4.27, DSS website, 4 January 2016.

[43].      Child Support (Assessment) Act 1989, subsections 56(2) and 57(7); DSS, ‘2.4.4.30 Changes to adjusted taxable income’, Child support guide, version 4.27, DSS website, 4 January 2016.

[44].      House of Representatives Standing Committee on Social Policy and Legal Affairs, From conflict to cooperation: inquiry into the Child Support Program, op. cit., p. 92.

[45].      Ibid.

[46].      Australian Government, Australian Government response to the House of Representatives Standing Committee on Social Policy and Legal Affairs report, op. cit., p. 7.

[47].      C Porter, ‘Second reading speech: Family Assistance Legislation Amendment (Protecting Children) Bill 2017’, op. cit.

[48].      DSS, ‘2.7.4 Effect of a child support agreement once accepted by the Registrar (other than lump sum payment provisions)’, Child support guide, version 4.27, DSS website, 4 January 2016.

[49].      DSS, ‘2.7.5 Changing or terminating a child support agreement’, Child support guide, version 4.27, DSS website, 3 January 2017.

[50].      Ibid.

[51].      DSS, ‘4.3.2 Applications & orders about decisions under the CSA Act’, Child support guide, version 4.27, DSS website, 20 September 2016.

[52].      National Legal Aid, Submission to House of Representatives Standing Committee on Social Policy and Legal Affairs, From conflict to cooperation: inquiry into the Child Support Program, [submission no. 57], June 2014, pp. 5–6.

[53].      Family Law Section of the Law Council of Australia, Submission to House of Representatives Standing Committee on Social Policy and Legal Affairs, From conflict to cooperation: inquiry into the Child Support Program, [submission no. 59], June 2014, p. 3.

[54].      House of Representatives Standing Committee on Social Policy and Legal Affairs, From conflict to cooperation: inquiry into the Child Support Program, op. cit., p. 92.

[55].      Australian Government, Australian Government response to the House of Representatives Standing Committee on Social Policy and Legal Affairs report, op. cit., p. 7.

[56].      C Porter, ‘Second reading speech: Family Assistance Legislation Amendment (Protecting Children) Bill 2017’, op. cit., p. 10417.

[57].      House of Representatives Standing Committee on Social Policy and Legal Affairs, From conflict to cooperation: inquiry into the Child Support Program, op. cit., p. 139.

[58].      Ibid.

[59].      DSS and DHS, Submission to House of Representatives Standing Committee on Social Policy and Legal Affairs, op. cit., p. 31.

[60].      Ibid.

[61].      National Legal Aid, Submission to House of Representatives Standing Committee on Social Policy and Legal Affairs, op. cit., pp. 4–5.

[62].      Australian Government, Australian Government response to the House of Representatives Standing Committee on Social Policy and Legal Affairs report, op. cit., p. 11.

[63].      C Porter, ‘Second reading speech: Family Assistance Legislation Amendment (Protecting Children) Bill 2017’, op. cit., p. 10417.

[64].      Explanatory Memorandum, op. cit., p. 2.

[65].      Ibid., p. 3.

[66].      DSS, ‘2.1.1.70 Disputed care arrangements’, Family assistance guide, version 1.198, DSS website, 16 May 2016.

[67].      Attorney-General’s Department, Submission to House of Representatives Standing Committee on Social Policy and Legal Affairs, From conflict to cooperation: inquiry into the Child Support Program, [submission no. 95], 8 July 2014, p. 4.

[68].      Explanatory Memorandum, op. cit., p. 5.

[69].      Ibid., p. 6.

[70].      DSS, ‘2.1.1.70 Disputed care arrangements’, op. cit.

[71].      Child Support (Assessment) Act 1989, subsections 56(2) and 57(7); DSS, ‘2.4.4.30 Changes to adjusted taxable income’, op. cit.

[72].      Explanatory Memorandum, ‘Statement of compatibility with human rights’, op. cit., p. 5.

[73].      Explanatory Memorandum, op. cit., p. 21. Under section 151 of the CSA Act, ‘a carer entitled to child support for a child may, by notice given to the Registrar, elect that the liability of a liable parent to pay or provide child support for the child to the carer entitled to child support is to end from a specified day’.

[74].      DSS, ‘2.4.2 Formula tables & values’, Child support guide, version 4.29, DSS website, 2 January 2018.

[75].      DSS and DHS, Submission to House of Representatives Standing Committee on Social Policy and Legal Affairs, op. cit., p. 31.

[76].      C Porter, ‘Second reading speech: Family Assistance Legislation Amendment (Protecting Children) Bill 2017’, op. cit., p. 10417.

[77].      House of Representatives Standing Committee on Social Policy and Legal Affairs, From conflict to cooperation: inquiry into the Child Support Program, op. cit., p. 139.

[78].      Ibid.

[79].      National Legal Aid, Submission to House of Representatives Standing Committee on Social Policy and Legal Affairs, op. cit., pp. 4–5.

[80].      Section 113A of the CSRC Act provides for a payee of a registered maintenance liability to sue for and recover a debt due in relation to the liability if the payee notifies the Registrar of their intention prior to instituting proceedings (subject to certain notification requirements).

[81].      DSS, ‘2.4.4.60 New information about adjusted taxable income’, Child support guide, version 4.29, DSS website, 16 May 2016.

[82].      S Prasad, Vaccines on the frontline against infectious diseases, Occasional paper series, 10, June 2015, Office of the Chief Scientist, Canberra, 2015, p. 3.

[83].      Ibid.

[84].      Department of Health (DoH), ‘About the program’, Immunise Australia Program website, 20 April 2015; Australian Government, Federal financial relations: budget paper no. 3: 2017–18, pp. 26–7; DoH, Essential vaccines procurement strategy, DoH, Canberra, 2014.

[85].      DoH, ‘Parents and adolescents’, Immunise Australia Program website, 2 December 2015.

[86].      National Health (Immunisation Program — Designated Vaccines) Determination 2014 (No. 1). A simpler version of the National Immunisation Program Schedule is available at DoH, ‘National Immunisation Program Schedule’, Immunise Australia Program website, 25 November 2016.

[87].      Child Care Legislation Amendment Act 1998 (Cth); Family Assistance and Other Legislation Amendment Act 2012, (Cth). For a history of immunisation requirements attached to social security payments, see M Klapdor, Social Services Legislation Amendment (No Jab, No Pay) Bill 2015, Bills digest, 36, 2015–16, Parliamentary Library, Canberra, 22 October 2015.

[88].      T Abbott (Prime Minister) and S Morrison (Minister for Social Services), No jab - no play and no pay for child care, joint media release, 12 April 2015; S Morrison (Minister for Social Services), Government ends religious ‘no jab no pay’ of benefits exemption, media release, 19 April 2015.

[89].      M Klapdor and A Grove, ‘”No Jab No Pay” and other immunisation measures’, Budget review 2015–16, Research paper series, 2014–15, Parliamentary Library, Canberra, 2015, pp. 84–6; A Grove, Australian Immunisation Register Bill 2015 [and] Australian Immunisation Register (Consequential and Transitional Provisions) Bill 2015, Bills digest, 25, 2015–16, Parliamentary Library, Canberra, 1 October 2015; Australian Government, ‘Part 2: expense measures’, Budget measures: budget paper no. 2: 2015–16, pp. 101, 167.

[90].      DoH, No jab, no pay – new immunisation requirements for family assistance payments, fact sheet for vaccination providers, 19 January 2017.

[91].      C Porter (Minister for Social Services) and G Hunt (Minister for Health), Government Strengthens No Jab, No Pay requirements, joint media release, 14 September 2017.

[92].      DoH, ‘AIR - current data’, Immunise Australia Program website, 30 January 2018; DoH, ‘AIR - annual coverage historical data’, Immunise Australia Program website, 27 April 2017.

[93].      DoH, ‘AIR - current data’, op. cit.

[94].      C Porter (Minister for Social Services) and G Hunt (Minister for Health and Sport), Government Strengthens No Jab, No Pay requirements, op. cit.

[95].      Australian Institute of Health and Welfare (AIHW), Healthy communities: immunisation rates for children in 2015–16, AIHW, 8 June 2017, pp. 1, 5.

[96].      DHS, ‘Australian immunisation register for health professionals’, DHS website, 8 September 2017.

[97].      ‘Immunisation incentive payment working’, PharmaDispatch website, 14 September 2017.

[98].      National Centre for Immunisation Research & Surveillance (NCIRS), ‘No Jab No Play, No Jab No Pay Policies’, NCIRS website, August 2017.

[99].      C Johnson, ‘No Jab No Pay gets tougher’, Australian Medicine, 29(9), 15 May 2017, p. 10.

[100].   F Beard, J Leask and P McIntyre, ‘No Jab, No Pay and vaccine refusal in Australia: the jury is out’, Medical Journal of Australia, 206(9), 15 May 2017, pp. 381–3.

[101].   C Porter (Minister for Social Services) and G Hunt (Minister for Health and Sport), Government strengthens No Jab, No Pay requirements, op. cit., p. 2.

[102].   DHS, ‘Healthy start for school’, DHS website, 6 February 2018.

[103].   DSS, ‘2.1.3.50 Healthy start for school requirements (FTB)’, Family assistance guide, version 1.201, DSS website, 20 March 2017.

[104].   Ibid.

[105].   M Klapdor, ‘Omnibus Bill compromise to find further savings from family payments’, FlagPost, Parliamentary Library blog, 14 September 2016.

[106].   Senate Community Affairs Legislation Committee, Answers to Questions on Notice, Supplementary Budget Estimates, 2016–17, Social Services Portfolio, Question no. SQ16-000325.

[107].   DSS, Annual report 2016–17, DSS, Canberra, p. 42.

[108].   Australian Government, Budget measures: budget paper no. 2: 2017–18, op. cit., p. 157.

[109].   DSS, ‘2.1.3 Immunisation & health check requirements’, Family assistance guide, version 1.201, DSS website, 20 March 2017.

[110].   C Porter (Minister for Social Services) and G Hunt (Minister for Health and Sport), Government Strengthens No Jab, No Pay requirements, op. cit.

[111].   B Cassidy, ‘Interview with Pauline Hanson’, Insiders, transcript, Australian Broadcasting Corporation (ABC), 5 March 2017.

[112].   Australian Council of Social Service (ACOSS), ACOSS statement on No Jab No Pay, media release, 14 September 2017.

[113].   National Social Security Rights Network (NSSRN), Budget 2017 – family payments, NSSRN, May 2017.

[114].   M Gannon (Australian Medical Association President), Dr Gannon – transcript - federal budget, media release, 9 May 2017.

[115].   Quoted in C Johnson, ‘No Jab No Pay gets tougher’, Australian Medicine, 5 May 2017.

[116].   Explanatory Memorandum, op. cit., p. 2.

[117].   C Porter (Minister for Social Services) and G Hunt (Minister for Health and Sport), Government Strengthens No Jab, No Pay requirements, op. cit.

[118].   DSS, ‘2.1.3.40 Immunisation – approved exemptions (FTB, CCB)’, Family assistance guide, version 1.201, DSS website, 3 July 2017.

[119].   M Klapdor and A Grove, Social Services Legislation Amendment (No Jab, No Pay) Bill 2015, op. cit., pp. 10–14.

[120].   DoH, ‘AIR – annual coverage historical data’, op. cit.

[121].   J Frawley, H Foley and E McIntyre, ‘The associations between medical, allied and complementary medicine practitioner visits and childhood vaccine uptake’, Vaccine, 36(6), February 2018, p. 866.

[122].   Ibid., p. 870. The majority of respondents (91.1 per cent) reported that their child’s vaccinations were already up to date prior to the legislative changes.

[123].   Ibid., p. 868.

[124].   Ibid., p. 872.

[125].   A Pearce, H Marshall, H Bedford and J Lynch, ‘Barriers to childhood immunisation: findings from the longitudinal study of Australian children’, Vaccine, 33, 2015, p. 3381.

[126].   Beard, Leask and McIntyre, ‘No Jab, No Pay and vaccine refusal in Australia: the jury is out’, op. cit., p. 383.

[127].   DoH, ‘AIR – national vaccine objection (conscientious objection) data’, DoH website, 8 February 2017.

[128].   DHS, ‘Immunisation requirements’, DHS website, 9 November 2017.

[129].   The current health check requirement is specified in the Family Tax Benefit (Meeting the Health Check Requirement) Determination 2011 made under subsection 61A(5).

[130].   DHS, A guide to Australian Government payments: 1 January–19 March 2018, DHS, Canberra, p. 3.

[131].   Ibid., p. 2.

[132].   DSS, ‘3.1.1.10 Calculating rate of FTB – overview’, Family assistance guide, version 1.201, DSS website, 20 March 2017.

[133].   As a result of amendments by the Social Services Legislation Amendment Act 2017. For background, see M Klapdor, ‘Omnibus Bill dropped and new savings Bill introduced to fund child care package’, FlagPost, Parliamentary Library blog, 22 March 2017.

 

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