4.1
The committee noted in its second interim report that it did not have sufficient time to consider several issues relating to child support that were raised in the many submissions the committee received. Accordingly, that report did not contain any committee views or recommendations on the Child Support Scheme (the CSS). Given this, the committee extended its inquiry with the aim of focusing specifically on the CSS and its interactions with the family law system.
4.2
In extending the inquiry, the committee's goals were twofold: firstly, to allow for a better analysis of the existing evidence; and secondly, to provide an opportunity to gather additional evidence through a further public hearing and to question key government agencies and stakeholders.
4.3
The committee believes the CSS is a vital social policy, noting that it supports over one million children and involves approximately 1.25 million parents. The committee is of the strong view that the CSS is essential to relieve pressure on the courts; and to reduce costs, delays and stresses on parents that are associated with court proceedings.
4.4
Across the life of the inquiry, the committee heard from a broad range of participants who were generous enough to provide their personal experiences with the CSS, and any key insights they discovered and issues they encountered. The below discussion provides the committee's view on a number of these key issues, as well as any associated recommendations aimed at addressing systemic problems and improving the outcomes for children involved with the CSS.
4.5
Although the overriding objective of the CSS is to ensure that children receive a proper level of financial support from their parents, the committee's recommendations also aim to improve the CSS's general operation and the experience for both its payer and payee clients.
4.6
The committee would like to note, however, that although numerous issues with the CSS were raised, especially around the assessment formula and amounts payable, evidence provided indicated that less than 40 per cent of cases involved payments of $5000 per annum or more, and that approximately 30 per cent of cases had amounts payable of $500 or less. Importantly, the committee was also advised that the median child support payable under the formula was only $3354 per annum; or approximately $65 per week.
Scheme accessibility
General accessibility
4.7
The committee notes that Services Australia currently provides information and services on its website, and that CSS clients are able to contact trained staff and request interpreter assistance, if required. Notwithstanding this, the committee is concerned that evidence indicated that client correspondence can be confusing; there are long telephone wait times; and there is an overreliance on the use of numerous technical terms without adequate plain English explanations.
4.8
Given this, the committee is of the view that child support services provided by Services Australia should be enhanced and improved, with an aim of increasing accessibility—especially for people with disability and those who have low levels of English proficiency.
4.9
The committee recommends the Australian Government provides adequate resources to Services Australia to allow it to enhance its Child Support Scheme services, particularly to assist those clients who have a disability and/or low levels of English proficiency. The committee recommends these enhancements include, but are not limited to:
simplifying the language used in correspondence;
providing explanations of key concepts and technical terms;
improving telephone wait times;
improving information sharing with Centrelink; and
improving the interpreter service by ensuring that, upon agreement by the client, interpreters can access documentation being referred to during discussions.
4.10
The committee also notes that the House of Representatives' Standing Committee on Social Policy and Legal Affairs, in its final report to its inquiry into the Child Support Program (the 2015 Child Support Report), made two relevant recommendations to improve the general accessibility of the CSS:
Recommendation 1
The Committee recommends the Australian Government take steps to collect comprehensive demographic information on all clients of the Child Support Program, and use that information to ensure that child support tools, practices and procedures are culturally and linguistically tailored for the range of Child Support Program clients.
Recommendation 18
The Committee recommends the Australian Government create a mechanism for Child Support Program clients to nominate preferred communication methods, including restriction to phone calls or letters, to ensure that communication by the Child Support Program does not cause harm.
4.11
In answer to a question on notice, the Department of Social Services (DSS) updated the committee on its response to these recommendations. In relation to recommendation 1:
Services Australia has completed an assessment of the demographic data collected, to enable appropriate targeting of service delivery initiatives, including for the needs of culturally and linguistically diverse (CALD) Australians.
4.12
In relation to recommendation 18:
Services Australia updated its instructional material to guide staff to educate parents about the communication channels available to them and the ability to nominate a preferred channel for their communication with the department.
The Services Australia website was also updated in September 2017 with similar information.
4.13
Whilst the committee appreciates, and welcomes, the Government's progress in implementing these recommendations, the committee notes that further work must be done—especially around utilising the assessed demographic data to appropriately target service delivery initiatives.
4.14
The committee strongly supports the full implementation of both of these recommendations by the Australian Government by 31 December 2021.
4.15
The committee recommends the Australian Government fully implements recommendations 1 and 18 made by the House of Representatives' Standing Committee on Social Policy and Legal Affairs in 2015 in its report, From Conflict to Cooperation: Inquiry into the Child Support Program, by 31 December 2021.
Stakeholder consultation
4.16
The committee notes that a number of inquiry participants highlighted that the Child Support National Stakeholder Engagement Group (engagement group) no longer operates, and has not met since 2014. When operational, this group was jointly convened by DSS and the then Department of Human Services and discussed current child support policy; child support service delivery; and child support administration processes.
4.17
Evidence provided to the committee indicated that many stakeholders believe this group was an essential forum which connected a cross-section of advocacy groups, the legal community, academics, and relevant peak bodies.
4.18
The committee strongly believes that ongoing community engagement is an essential feature of effective government decision making and policy development. The committee understands the Engagement Group was an effective mechanism to engage stakeholders and provided an avenue for community education. Importantly, this group also allowed stakeholders to provide direct feedback to the government on how various policies were working, or not working, in practice.
4.19
Given this, the committee is of the view that the Child Support National Stakeholder Engagement Group, or an equivalent forum, should be reconvened as soon as possible.
4.20
The committee recommends the Australian Government reconvenes regular meetings of the Child Support National Stakeholder Engagement Group, or an equivalent forum, to ensure that all relevant stakeholders can have their voices heard. In doing so, the committee recommends that:
the group reconvenes before the end of 2021;
the group meets at least twice every year;
the group publishes meeting minutes to promote accountability and transparency;
the relevant departments provide ongoing updates to the group against action items and issues raised at prior meetings; and
the relevant departments provide regular updates to their minister(s) on issues raised by the group and progress made in resolving those issues.
Co-location of child support officers in family law courts
4.21
The committee believes that co-locating child support officers, as Court Liaison Officers, in family law courts could be highly beneficial for CSS clients. Similar to the 2020 pilot of co‑locating state and territory child protection and policing officials in family law courts across Australia, the committee believes a comparable approach with child support officers could increase the quality and timeliness of information sharing between the administrative and legal systems, and assist both the courts and Services Australia having prompt access to all relevant information.
4.22
As stated in the committee's second interim report, the committee supported the 2020 pilot program and, subject to a positive evaluation, recommended that it be expanded to all Federal Circuit and Family Court of Australia (Family Court) registries and locations (see recommendation 1).
4.23
Although stating that it remains a policy decision for the Government, the committee notes that the Family Court was 'supportive of considering enhanced information sharing between the Courts and the Child Support department', and that it believes a Court Liaison Officer would:
… assist parties (particularly unrepresented litigants) with the difficulties occasioned by dealing with two separate systems if they were able to obtain information about child support processes whilst engaging with the family law system.
4.24
Given this, the committee is of the view that the Australian Government should consider a twelve month pilot program of co-locating Child Support Scheme officers, as Court Liaison Officers, in family courts across Australia, with the view of a broader rollout upon the pilot's successful completion.
4.25
The committee recommends the Australian Government undertakes a twelve month pilot program of co-locating Child Support Scheme officers, as Court Liaison Officers, in a number of Federal Circuit and Family Court of Australia registries. Further, the committee also recommends that, subject to a positive evaluation of the pilot, the program be expanded to all Federal Circuit and Family Court of Australia registries and locations.
Publicly available data and transparency
4.26
The committee believes high quality data are an essential input for informed decision making, and that they are a key ingredient in improving the performance of government schemes which affect broad cross-sections of the community with varied situations and circumstances. The committee highlights that the 2015 Child Support Report also emphasised the importance of data, and recommended that the Australian Government make anonymised statistical information on the CSS, and its clients, available (Recommendation 2).
4.27
Notwithstanding that DSS began publishing quarterly child support data on data.gov.au from the March 2018 quarter onwards in response to the 2015 Child Support Report's recommendation, based on evidence provided by the academic community during this inquiry, the committee remains concerned that there continues to be a lack of available government data on the CSS.
4.28
Given this, the committee is of the view that the Australian Government needs to promptly engage interested stakeholders to determine their data needs. The committee believes such an approach would allow researchers to better assess the systemic nature of claims made by various groups and stakeholders, and to advise on options to improve the effectiveness of the system, resulting in better outcomes for more CSS participants. The committee acknowledges any such data provided would need to be anonymised to maintain privacy.
4.29
The committee recommends the Australian Government engages with interested stakeholders to assess their data needs. Further, following such an engagement, the committee recommends the Australian Government publishes, to the extent possible, these requested datasets on an ongoing basis and in an anonymised way.
Private-collect arrangements
4.30
The committee notes that approximately 50 per cent of child support payments are made and received under Private Collect arrangements. Unlike Child Support Collect, which involves Services Australia, Private Collect is a direct arrangement between parents without government support. Hence, payments are made and received directly by the two parties.
4.31
The committee is concerned that the CSS assumes that Private Collect arrangements are 100 per cent compliant, and that this is overestimating actual compliance rates as well as potentially hiding financial abuse. Although recognising that CSS participants can change from Private Collect arrangements to Child Support Collect arrangements, the committee is concerned that if initiated by one party, it may cause an adverse response from the other party. The committee is cognisant that this may result in situations where Private Collect arrangements inappropriately remain in place when they are not being complied with and debts are accruing.
4.32
The committee also notes that the 2015 Child Support Report recommended that the Australian Government conduct ongoing statistical surveys to determine the rate of actual payment under Private Collect arrangements, and that it publish the results (Recommendation 19).
4.33
DSS updated the committee noting that from March 2018, 'child support data was published on data.gov.au to provide data on the assessment amounts of private collect users'.
4.34
The committee recommends the Australian Government regularly assesses the compliance rates of Private Collect arrangements and publishes the resulting information.
Child support payment debt and government guarantee
4.35
The committee is concerned that Australia currently has a $1.6 billion child support debt, and that this figure is trending in the wrong direction. Further, the committee notes that this already large amount may not even represent the true extent of child support debts as it does not account for Private Collect debts and those which have been written off.
4.36
The committee agrees with the assertion made during the inquiry that parents' non‑compliance with their child support obligations is equivalent to stealing from children. The committee believes that urgent action must be taken to reduce the existing child support debt levels and to promote the ongoing prompt payment of assessed child support.
4.37
Recognising this increasing debt level and the negative impact it may be having on children, the committee notes that a number of submitters proposed a guarantee mechanism to ensure that payments are made to the payee parent irrespective of the payer parent's compliance.
4.38
Under such a framework it was proposed that any unpaid child support would become a debt to the Government and be pursued accordingly. The committee believes this suggestion has merit as the Government is better placed to recover outstanding debts than any individual parent, and can leverage its existing expertise and systems to effectively reduce debt levels.
4.39
As highlighted in the committee's first interim report, a similar guarantee proposal was also suggested in the 2015 Child Support Report by the House of Representatives' Standing Committee on Social Policy and Legal Affairs. That committee believed that a limited, targeted guarantee system could protect vulnerable families in the CSS.
4.40
Notwithstanding the Government's rejection of the recommendation, the committee believes there is merit in exploring a guarantee. The committee believes that such a mechanism could improve the financial security of children and reduce the risk of child support being weaponised as a form of ongoing financial abuse.
4.41
Hence, it is the view of the committee that the Australian Government reconsiders its response to recommendation 24 made in the 2015 Child Support Report regarding conducting a trial of a limited financial guarantee.
4.42
The committee recommends the Australian Government reconsiders the feasibility of conducting a trial of a limited financial guarantee for either vulnerable families or a randomised sample of Child Support Scheme clients.
4.43
The committee recommends the Productivity Commission undertakes an inquiry into the Child Support Scheme to review compliance with assessments of child support made by the Child Support Registrar.
Proving parentage
4.44
The committee notes that a number of submitters raised concerns regarding the evidence required to prove parentage under the CSS. The committee is concerned that, if one parent refuses to acknowledge parentage, regardless of DNA evidence confirming it, the other parent has to commence court proceedings to obtain a statutory declaration. Conversely, the committee is also concerned with evidence indicating that if DNA evidence confirms that a person is not a parent, they currently need to initiate court proceedings to end an administrative assessment.
4.45
Given this, the committee is of the view that where a DNA result is obtained, consistent with the parentage testing procedures as specified in the Family Law Regulations 1984 (Part IIA), the Registrar should be able to administratively determine a presumption of parentage on the basis of this result. Further, the committee also believes that there should be an administrative mechanism to end an assessment of child support based on accredited DNA evidence.
4.46
The committee recommends the Child Support (Assessment) Act 1989 be amended to allow the Child Support Registrar to accept applications for administrative assessments of child support using accredited DNA evidence, without requiring a declaration under section 106A.
4.47
The committee recommends the Child Support (Assessment) Act 1989 be amended to allow the Child Support Registrar to end administrative assessments using accredited DNA evidence.
Financial abuse and family violence
4.48
The committee notes that numerous submitters expressed concerns regarding child support being weaponised to perpetuate financial abuse after separation. The committee is very concerned about these reports, and the evidence suggesting that some individuals are making intermittent payments, or withholding them entirely—resulting in significant challenges for the payee parent who is relying on these payments to support their child/ren.
4.49
Given this, the committee is of the view that the Family Law Act 1975 (Family Law Act) needs to be amended to recognise the non-payment of child support as a relevant factor when determining the existence of financial abuse. The committee also notes that in its second interim report it made a recommendation to make amendments to the Family Law Act to better reflect the impact of family violence on property settlements (Recommendation 23).
4.50
Further, although being advised that staff within Services Australia are trained in the use of the Child Support Risk Identification and Referral Model, the committee agrees with calls for further training for staff to enhance their ability to identify cases where domestic or family violence may exist, and to provide the correct advice and assistance.
4.51
The committee recommends that section 4 of the Family Law Act 1975 be amended to recognise persistent underpayment and/or non-payment of child support as relevant factors in determining the existence of abuse.
4.52
The committee recommends that staff within Services Australia undertake enhanced training to ensure they can effectively identify child support cases where domestic or family violence may exist, and that they are equipped with the skills and knowledge to provide timely advice and assistance.
Lump sum payments
4.53
The committee notes that sections 77A and 90SH of the Family Law Act 1975 (Family Law Act) makes provision for the Family Court to:
… order that lump sum payments or transfers of property be made by way of provision of maintenance for a party, provided that this is done expressly and that the Court specifies the portion of the payment, or the value of the portion of the property, attributable to the provision of maintenance. This may be done in the context of orders providing for property settlement between the parties, with a specified portion or component of the settlement being attributed to satisfaction of a party’s maintenance obligations towards the other.
4.54
Notwithstanding this provision in the Family Law Act, the committee notes that no equivalent provision exists within the child support legislative framework. As highlighted by the court, this provision provides it with 'the ability to make provision for the maintenance of a party in a manner that does justice between the parties in appropriate circumstances'.
4.55
The committee believes there may be significant benefits in having an equivalent provision within the child support legislation and, hence, is of the view that the Government should consider the benefits of introducing such a provision.
4.56
The committee recommends the Australian Government considers the benefits of introducing lump sum child support payments into the child support legislation. The committee envisages such provisions would be equivalent to those within the Family Law Act 1975 which allow for lump sum payment orders.
Issues raised during the inquiry
4.57
During the course of the inquiry, a range of issues have been raised in submission and by witnesses. These include whether:
a parent's child support income should be based on after‑tax income, not pre‑tax income;
a parent's child support income should be based on a 38 hour working week, and not take into account any overtime;
there should be restrictions on the amount of child support that can be garnisheed from bank accounts and wages, ensuring at least the self‑support amount remains available;
child support assessments should be based on the number of children at the time of separation;
residential costs are the individual costs of parents as, with shared parenting, each parent needs to have a separate home which can provide accommodation for their child;
child support assessments should take into account the individual incomes of each parent as well as any Family Tax Benefit A and B payments;
a parent's ability to earn income should not be assessed as earnings or income unless it has been earned;
WorkCover compensation payments resulting from injuries in the workplace, or total and permanent disability payments, should not be included when determining a parent's child support income;
superannuation payments should not be included when determining a parent's child support income;
punitive action should result if a payee parent acts in contravention of court orders or mutual agreements regarding visitation rights;
the cost of maintaining a child is what should determine the actual contributions from both parents, as child support is payable to enable the provision of adequate food, clothing, health, and education for a child;
payments should be deposited in a special child support account to ensure that child support payments are spent on the child. Further, the receiving parent should be held to account by Services Australia on review;
child support payments should incorporate the travel incurred in the delivery of a child between parents, as it is a shared responsibility; and
the number of cost percentages should be rationalised to reduce complexity.
4.58
These are incredibly complex matters. The committee acknowledges that any proposed changes to the formula may have unintended outcomes. The committee has neither the time nor the expertise to properly consider these issues, including the impact on parents and on the Australian Government if changes were to be made.
4.59
The committee recommends that the Australian Government convenes a Ministerial Taskforce, together with an Expert Working Group including a representative of both custodial and non-custodial parents, to examine any of the issues raised regarding the Child Support Scheme which the taskforce considers to have merit.
Child support assessment formula
4.60
The committee notes that inquiry participants raised numerous issues that they perceived with the child support assessment formula. The following discussion highlights a number of these issues, while also providing any associated recommendations which the committee believes will improve the operation of the formula.
The formula does not capture the level of care actually provided
4.61
Currently the child support assessment formula determines the level of care based on the number of nights a parent has a child. During the inquiry the committee heard concerns with this approach from a number of participants, with the common critique being that it may not account for the potentially significant number of hours a parent provides care outside of night stays.
4.62
The committee acknowledges that this is a legitimate concern; however, on balance, it is satisfied that there is an existing mechanism in place which caters for these circumstances. Specifically, as mentioned in chapter 3, parents and non‑parent carers can request that the number of hours of care, as opposed to number of nights of care, be calculated for each carer to determine the pattern of care. The Registrar can then take this information into account when determining whether nights or hours is the more appropriate measure.
The formula promotes underemployment by providing a disincentive to work
4.63
The committee notes that a number of submitters argued that that formula promotes underemployment and provides a disincentive for parents to take on overtime or a second job to improve their financial situation. Many submitters also stated that they struggled with the costs of establishing a new residence after separation, often while still paying the mortgage on the family home and contributing to other expenses.
4.64
Although DSS advised that, in recognition that parents may incur extra costs to re-establish themselves following separation, either parent may apply to have additional income excluded from their adjusted taxable income for child support purposes for a three year period post-separation, it became apparent to the committee during many of the in camera hearings that a large number of individuals were not aware of this exemption for additional income.
4.65
The committee is concerned about the lack of general awareness of this key exemption which promotes employment and assists parents re-establish themselves after separation, and to which they are entitled to apply. Hence, the committee is of the view that public information relating to the three-year exemption be clearly brought to each payee's attention at the time of the first child support assessment.
4.66
The committee recommends that Services Australia updates and enhances its public information relating to the three-year additional income exemption, with a view to making the information more prominent and accessible. Further, the committee recommends the exemption be clearly brought to a payee's attention at the earliest opportunity, preferably from the first communication by Services Australia.
The formula does not account for a parent's earning capacity
4.67
It was contended by some submitters that the assessment formula does not adequately account for circumstances where parents aim to reduce their child support obligations by taking jobs below their potential earning capacities.
4.68
The committee acknowledges this as a legitimate concern; however, it is not convinced that this is a widespread issue. Further, the committee is satisfied with the advice provided by DSS that, under the existing change of assessment process, Services Australia may base a child support assessment on a parent's capacity to earn, rather than a parent's adjusted taxable income, if certain criteria are met.
The formula promotes unhealthy custody arrangements and non-compliance with court orders
4.69
During the inquiry, the committee heard on a number of occasions of one parent withholding court ordered access from the other parent and then having the child support assessment amended to recognise that that parent now had 100 per cent care.
4.70
While the committee generally agrees with the statement that the child support system should recognise a parent's obligation to provide support for their child without it being tied to the other parent's compliance with a court order or care agreement, it considers that it has the potential for perverse outcomes in this situation.
4.71
In situations where one parent chooses not to comply with their obligations to care for their children and leaves the children in the care of the other parent, despite a court order, these provisions operate to financially penalise the parent who is in breach of the court orders by ensuring that the child support payable reflects the actual care arrangements for the children.
4.72
However, the committee has heard about situations where one parent has breached the court orders and withheld care from the other parent, who has stated that they are willing and able to provide care. In some cases, these matters have not been resolved within the interim period. In these circumstances, submitters have argued that the parent breaching the orders have been financially rewarded for their non-compliance by having the child support assessed in line with the care arrangements they have unilaterally instigated.
4.73
The committee is concerned that this results in the orders of one Commonwealth institution being undermined by a second Commonwealth agency. Furthermore this could also result in the person potentially in breach of the orders being incentivised by receiving greater child support payments to not comply with the orders. While acknowledging the purpose of child support is to ensure that children are adequately financially supported, the CSS should not operate to financially reward one parent's contravention of a court's decision as to what care arrangements are in the best interests of the child/ren.
4.74
The committee acknowledges that this is not an easy issue to rectify. There may be many and varied reasons why a parent is denying access to the children and potentially breaching court orders. It is generally the responsibility of the parent who is claiming that orders have been breached to bring contravention action against the other parent in the Family Court of Australia (the Family Court). Notwithstanding this, the committee is of the view that consideration be given to requiring the parent who is seeking a change to the child support assessment to reflect the changed care arrangement to seek a formal change to the court orders.
4.75
The committee considers it inappropriate and unfair that currently the onus rests with the denied parent to take reasonable action to have the care arrangement complied with, whilst the parent alleged to be in breach is only required to participate in family dispute resolution—and may be rewarded for doing so by a reduction in the interim period. Ostensibly this does not seem to the committee to be a fair process or outcome. Where the court considers an application for a change to the orders, consideration should be given to requiring the child support assessment to then be based on those reconsidered orders.
4.76
During the inquiry, the committee heard that contravention of order proceedings can take a significant period of time. In consideration of these issues, in its second interim report the committee recommended the creation of a National Contravention List to deal with parties breaching court orders in the Family Court (Recommendation 19). The committee understands that this recommendation has been agreed to and adopted by the Family Court. The committee reiterates the importance of the establishment of the proposed National Contravention List, and the resourcing of that measure, as it will assist in these matters being heard within 14 days and in more timely resolution for both parties.
4.77
The committee recommends that the Australian Government considers whether child support assessments should be automatically changed to reflect amended court orders.
4.78
The committee recommends that the Australian Government reviews the interim-care provisions so that they better support compliance with family law orders and do not operate to undermine the court's decision in relation to the best interests of the children, including requiring a parent or party who has varied interim parenting orders or contact time to approach the court to seek a variation of interim orders prior to seeking any variation or amendment to the child support assessment.
The formula relies on assumptions which do not reflect the cost of raising a child in Australia
The costs of the children table does not reflect the costs of raising a child
4.79
Based on evidence provided during the inquiry, the committee is concerned that the costs of the children table utilised by the child support formula is outdated and no longer fit-for-purpose. The committee notes that the original costings were undertaken over 16 years ago, in 2004, during a review of the CSS by an independent Ministerial Taskforce. Although acknowledging that the table is indexed annually with Male Total Average Weekly Earnings (MTAWE), the committee remains concerned that the costings do not reflect the significant changes in consumption patterns since its introduction.
4.80
The committee also notes that, amongst other things, the 2015 Child Support Report recommended that the Government review the CSS to ensure the adequacy of amounts, and equity for both payers and payees, with respect to the costs of the children table and its indexation mechanisms.
4.81
The general view of the Ministerial Taskforce was as follows:
There are no fixed or absolute costs of a child. The estimated costs of raising a child increase with household income, and generally decline with income level. Higher income households have greater living standards, which children share. Such households, for example, are more likely to pay for private education, buy brand name clothes and go on expensive holidays.
The costs of the first child are often greater than the costs for each subsequent child. This is due to economies of scale resulting from hand-me-downs and shared infrastructure (such as bedrooms and furniture). When there is a large number of children in a household, there can be diseconomies of scale due to the extra costs of upgrading to larger houses and cars (or second cars).
Estimates of the costs of a child generally increase with the age of the child. The main exception is when all-day child care is required for pre-school age children to enable the parent(s) to undertake employment.
Depending on the sensitivity of the method used, the costs of a child varies according to the situation of the household, such as geographical location and the working arrangements of the parent or parents.
4.82
The Ministerial Taskforce provided detailed breakdowns of estimated costs of raising a child/ren across a multitude of care scenarios and capital city locations. Their report highlighted the additional costs in raising a child when care is shared by both parents:
… the non-resident parent (at modest but adequate living standard level, working full-time) with 20 per cent contact with a 6 year old has average costs of $3,950 per annum. While this is significantly less than the costs the resident parent faces, it is still disproportionate to the time (20 per cent) spent with the child. Thus, [this] shows that the non-resident parent faces 38 per cent of the costs of the child in 100 per cent care with a sole parent. All up, in this separated household, the total costs of this child are, on average, $14,170 per annum (see Table 6), or 37 per cent more than the total costs of raising the child completely in a single household.
Looking at the equivalent low cost household, the resident parent with 100 per cent contact incurs substantially less costs (due to a lower living standard and no child care costs) of $5,490 per annum. When regular contact occurs, the resident parent’s costs again decline by 1 per cent to $5,460 per annum while the non-resident parent faces average costs of $3,320 per annum, or a high 60 per cent of the costs of raising a child in one household. The total costs across the two households are $8,780 per annum; 59 per cent greater than the costs of raising the child in one household.
4.83
The committee highlights that, although the Ministerial Taskforce found that the costs of children tended to increase with household income, evidence provided to the current inquiry was not definitive on the current strength of this relationship. Further, the committee is of the view that other factors not currently accounted for, such as a child's geographical location, may also materially impact costs. Given this, the committee believes further research is required to determine the key factors influencing the costs of raising children in contemporary Australia, and an assessment of the significance of their impacts.
4.84
The committee recommends the Australian Government urgently updates the Costs of the Children Table to reflect the current costs of raising children in Australia. This would include a thorough assessment of whether the costs of raising children in Australia are a function of parental income and whether other factors, such as geographical location, should also be considered.
The costs of the children table does not scale with family size
4.85
The committee believes that the cost table utilised by the formula does not adequately account for larger families. Although scaling with increasing family size, up to three children, it fails to recognise the additional costs involved for caring for four or more children. It is the committee's view that the table should be amended to better scale with the size of families to reflect the additional costs of additional children.
4.86
The committee recommends the Costs of the Children Table be amended to better reflect the costs of raising four or more children.
The Hon. Kevin Andrews MP
Chair