This chapter discusses a number of key issues with the Child Support Scheme (the CSS) raised by inquiry participants throughout the committee's inquiry. It utilises information contained in the committee's first interim report, and supplements it with further analysis and evidence obtained after that report was published. The chapter is divided into two broad sections:
general issues raised by inquiry participants; and
specific issues raised regarding the assessment formula.
General issues raised by inquiry participants
The following section covers a broad range of issues with the general operation of the CSS that were raised with the committee by inquiry participants. Specifically, these related to:
the availability of CSS data;
child support debts and government guarantees;
the use of the CSS to perpetuate financial abuse.
Accessibility of the Child Support Scheme
To assist separating parents through the child support application and assessment process, Services Australia provides information online via its website. Through a self-service interface, clients can set up a myGov account; obtain information about their assessment; report changes; and upload electronic forms. Clients are able to call via the telephone and speak to trained staff who have access to electronic client case records, and can also request that an interpreter be arranged if required.
Notwithstanding the above information and options, National Legal Aid (NLA) highlighted in its submission that it is common for a significant cohort of its child support clients to indicate that they cannot understand the details of their individual case, and that they experience difficulty when attempting to update their information. NLA stated that amongst this cohort are people with disabilities, and people with low levels of English literacy who may not have English as their first language.
NLA noted that common issues raised by clients include confusing correspondence; long wait times for telephone calls to be answered; and reliance on confusing technical terms, such as 'provisional income', 'prescribed non‑agency payments', and 'adjusted taxable income'.
NLA also noted that its clients sometimes have incorrect assumptions regarding the extent to which Centrelink and Services Australia can share information about changes in their circumstances, and the need to lodge an income tax return or declaration. Another complication can also arise when a telephone interpreter is arranged but is unable to see the documents which are the subject of the discussion. Further, even with an interpreter, some key concepts are not easily translatable into other languages.
Given these issues, NLA made a number of suggestions to improve communications:
provide plain English explanations of key concepts;
provide notification of time limitations, including any consequences for delays;
provide a payer transaction statement, which discloses amounts related to any arrears and penalties;
improve information sharing between Centrelink and Services Australia; and
provide referral information for legal assistance, including to legal aid commissions.
A number of inquiry participants were disappointed that the Child Support National Stakeholder Engagement Group (the Engagement Group) no longer operates, and has not met since 2014. In his evidence to the committee, Professor Bruce Smyth of the Australian National University highlighted the importance of the Engagement Group. Specifically, he stated that:
Data used to be presented to the Child Support National Stakeholder Engagement Group, which hasn't been running for several years now—it was disbanded. Those stakeholder meetings were a great forum for community education, to help inform some of the various groups, and also for providing feedback to government about how the policies were working.
The National President of the Lone Fathers Association of Australia, Mr Barry Williams, also highlighted the importance of these meetings:
We met every three months—the Child Support Agency, our group, women's groups, family relationship services, Centrelink and everyone. We all had little tables there, and people could come and listen, and we could discuss people's problems, especially child support. We could discuss what was going on, why people weren't happy and that.
During its operation, the Engagement Group was jointly convened by the Department of Social Services (DSS) and the then Department of Human Services. It discussed current child support policy; child support service delivery; and child support administration processes, and its goal was to connect a cross‑section of advocacy groups; the legal community; academics; and the peak bodies of support service providers.
When queried about the Engagement Group, the Deputy Secretary of the Social Security Stream within DSS, Mr Matt Flavel, said:
My understanding is that it was actually created by the minister or ministers at the time. It sort of met under their auspices, so it would have been a matter for ministers at the time as to why it was disbanded, or not continued.
What I would say … is we're always happy to meet with representative groups, and it will come as no surprise … that we do that right across the range of areas that we're responsible for.
I don't want the committee to be under the impression that the absence of that group in any way diminishes our interest in ensuring that there is access to data and information and that we have solid engagement with stakeholders. We do that already regularly, and we're very happy to meet with stakeholder groups that want to come and talk to us about concerns about the system—not individual cases, obviously, but about policy and ways that the system works as a whole.
Government data regarding the Child Support Scheme
Professor Smyth raised concerns regarding the lack of available government data on the CSS. In his evidence to the committee, he submitted that the lack of available government data makes it hard to assess the various claims of different groups and individuals. He also noted that the CSS's facts and figures were last published in 2009, and have been replaced by 'scant quarterly reports buried on the data.gov website'. Given this, he concluded that '[i]t's really hard, as an academic, to follow what's going on with government data'.
Responding to this, senior representatives from DSS stated that data continue to be released on the data.gov.au website and that the department can facilitate the provision of additional information, including bespoke requests made by researchers and others. On this point, Mr Flavel specifically said:
As Ms Hunter [Branch Manager of Families and Payment Support] noted earlier in her answer about data, there are data sources on data.gov.au, but also we're happy to talk to academics and the like to see if there are other ways in which we can facilitate the provision of data.
Child support payment debt and government guarantee
The Chief Executive Officer of the National Council of Single Mothers and their Children (NCSMC), Ms Terese Edwards, raised her concerns with the committee regarding the existing, and growing, child support debt level in Australia. She highlighted that Australia currently has a $1.6 billion child support debt, and that even this large figure may not represent the true extent of debt levels as it does not account for private collect debts and those which have been written off. Given this, the NCSMC submitted that the CSS was not 'fulfilling its role' and recommended an inquiry into compliance be undertaken by an appropriate independent body, such as the Productivity Commission.
As highlighted in the first interim report, Safe Steps recommended that the Government urgently address the underpayment of child support:
Mothers head more than 80 per cent of single-parent households and government figures show it is mostly fathers who owe child support debt, making up $1.54 billion of the total $1.64 billion owed nationally. There is an urgent need for government to prioritise addressing the underpayment of child support by fathers. This will support greater parental equity and improve outcomes for children in the context of family separation as well as supporting their health and wellbeing into the future.
Dr Eslpeth McInnes submitted that the non-payment of child support is equivalent to stealing from children. She also called on the Government to ensure that child support is promptly paid and to stop allowing children to be victims. She recommended that child support arrears be paid by the Government to the payee parent and then recovered from the debtor parent.
Women's Safety NSW proposed an approach whereby child support payments would be incorporated into the taxation system, and collected by the Australian Taxation Office (ATO) in a similar way to income tax, Medicare levies, and Higher Education Loan Program repayments.
Notwithstanding the growing debt figure, Mr Flavel argued that the current child support arrangements are a vast improvement on the prior, court-based, system. Specifically he said:
Since the child support arrangements were put in place, around 94 per cent of all liabilities have been collected. Compared to the system that existed prior to that, which was essentially court base[d], the equivalent figure was around 30 per cent. Australian children have overwhelmingly done better from the system base[d] on where it is. Of those who use the system, half pay through the agency in what's known as agency collect. The other half are private collect. So half of the 600,000 are choosing, as separated parents, to have that arrangement done privately without a third party in the middle. That's a pretty positive endorsement about the system.
Noting that 50 per cent of child support payments are private-collect arrangements, Professor Smyth raised concerns regarding the 'black box' nature of these arrangements and how they are reported by the Government. Specifically he said:
The child support program continues to assume that private-collect cases are 100 per cent compliant. While this approach helps to improve compliance rates, as reported by government, it is an assumption that overestimates actual compliance, masks cases where financial abuse is occurring and reduces the amount of FTB [Family Tax Benefit] that payees can receive. While payees can opt to move back into agency collect at any point, many will not do so because of safety concerns or to 'keep the peace' or to keep things going as they are.
In its submission to the inquiry, Victoria Legal Aid (VLA) contended that there may be inconsistencies in decision-making regarding the enforcement of debts through the courts. It noted that '[n]ot paying child support has a significant detrimental impact on the receiving parent who can be left in a financially precarious situation'. Given this, VLA suggested that there should be a mechanism which allows for clarity to the receiving parent regarding the non‑enforcement of a child support debt, whilst also maintaining any privacy obligations to the payee parent.
Government-guaranteed child support payments
As highlighted in the committee's first interim report, a number of submitters proposed that the Government guarantee payments to the payee parent.
A similar proposal was also suggested by the House of Representatives' Standing Committee on Social Policy and Legal Affairs in its final report for its inquiry into the CSS (the 2015 Child Support Report). The 2015 Child Support Report argued that a limited, targeted guarantee system could help protect vulnerable families, and recommended that the Government:
examine the impacts of limited guarantees in other jurisdictions;
conduct modelling to assess the capacity to apply a limited guarantee in the Australian context; and then
consider the feasibility of a trial of limited guarantee for vulnerable families or a random sample of CSS clients.
In evidence to this committee, the NCSMC and Women's Legal Service NSW (WLSNSW) both supported the proposal, with the WLSNSW stating that guaranteed payments would improve financial security for mothers after separation, while also reducing the risk that child support is utilised to perpetrate financial control and abuse.
The Government did not agree with the recommendation and was of the view that parents should remain responsible for the payments of child support, noting that the payment of family assistance is at a higher rate if child support payments collected by Services Australia are not received.
Services Australia must be satisfied that a person to be assessed in relation to the costs of the child is a parent of the child. The administrative scope for this process is currently limited, and parentage disputes often need to be referred to the courts for resolution.
Where an application for a child support assessment has been refused 'due to a lack of evidence as to parentage', a person may apply, under section 106A of the Child Support (Assessment) Act 1989 (CSA Act), to a court for a declaration that the application should have been accepted because the person named is a parent of the child. Conversely, a person may also apply to a court 'for a declaration that they are not a parent of the child under section 107 of the CSA Act'.
As highlighted in the first interim report, a number of submitters raised concerns regarding the evidence required to prove parentage. For example, Victoria Legal Aid observed that proving parentage can be challenging in circumstances where 'a person is determined to be the parent through DNA testing but then refuses to sign a statutory declaration to acknowledge [parentage]'.
To enable the Registrar to accept an application using accredited DNA evidence, Victoria Legal Aid recommended that the CSA Act be amended to allow DNA evidence without the requirement for a declaration of parentage under section 106A. Conversely, Victoria Legal Aid also recommended that the CSA Act be amended to allow the Registrar to end an administrative assessment using DNA evidence, as under the current legislation it is only possible to end an administrative assessment through court proceedings.
Financial abuse and family violence after separation
Many submitters to the inquiry expressed concerns regarding situations where child support is used to perpetuate financial abuse after separation. For example, Women's Legal Service Queensland submitted that perpetrators may withhold or intermittently pay child support as a means of financial abuse.
As highlighted in the first interim report, Women's Safety NSW described how the 'refusal to pay child support can be a powerful mechanism by which a person may continue to exert power and control over their ex-partner' and recommended that section 4 of the Family Law Act 1975 be amended to recognise child support as a relevant factor in determining the existence of financial abuse.
Domestic Violence Victoria raised concerns about the CSS's capacity to effectively identify and manage 'family violence and controlling behaviours'.
The committee was advised that staff within Services Australia are trained in the use of the Child Support Risk Identification and Referral Model. It was submitted that this model provides a systemic method to help identify parents with risk factors indicating the possible need for intensive support and/or referral.
Notwithstanding the above, Engender Equality called for increased training to assist child support workers to identify 'cases where domestic or family violence exists, and to provide the information, support, assistance, and referral that may be required'.
The Australian Institute of Family Studies submitted that parents experiencing domestic violence were less likely to receive child support payments in full and on time, which can create significant challenges for parents who rely on child support payments to care for their children.
Specific issues raised regarding the assessment formula
The following section discusses a number of specific issues that inquiry participants raised regarding the CSS's assessment formula. These included that the formula:
does not capture the level of care provided;
does not account for a parent's earning capacity;
promotes unhealthy custody arrangements and non‑compliance with court orders; and
relies on assumptions which do not reflect the costs of raising children in Australia.
The formula does not capture the level of care actually provided
The child support assessment formula currently determines the level of care based on the number of nights a parent has a child. On this, the Acting Deputy Chief Executive Officer of the Customer Service Design Group at Services Australia, Mr Russell Egan, said:
The actual care provided relates principally to the number of nights per period that a child will spend under a particular parent's roof. So there's a percentage that would be determined on that basis. For example, we would determine shared care as being anything between 35 per cent and 65 per cent of time spent under the respective parents' roofs.
A critique of this approach, heard during the inquiry, was that it does not account for the potentially significant number of hours a parent may provide care for a child outside of night stays. Further, Relationships Australia suggested that the formula should be revised as it believes the current approach can impede Family Dispute Resolution (FDR) to make decisions based on the child's best interests.
In responding to these concerns, DSS advised that, while actual care is primarily related to the number of nights, there can be:
… circumstances where other factors can be taken into account. The default is the number of nights, but there may be circumstances in which that pattern does not reflect the actual care provided— for instance, where there was a raft of care being provided by one party during the day, in terms of school and the like. So the number of nights is used as a proxy for the purposes of determining the levels of care, but there are some circumstances in which other factors can be taken into account.
The Child Support Guide, available online, provides formal guidance on this issue, stating that:
Generally, the number of nights a person cares for a child will be the best measure of their percentage of care. However, there may be some occasions where only counting the nights in care does not accurately reflect the caring arrangements for the child. For example, one parent may provide care every night while the other parent provides care from 8am to 6pm every weekday.
In such cases, at the request of a parent or non-parent carer, the number of hours of care may be calculated for each carer in determining the pattern of care and then converted into a care percentage. The Registrar will take into account the information from each parent or non-parent carer about the care they provide and why they think nights or hours is the better measure of care.
The formula promotes underemployment by providing a disincentive to work
A number of submitters stated that the assessment formula promotes underemployment so as to reduce the amount paid in child support. For example, one submitter argued that the formula rewards parents with higher payments for not working and that, if both parents choose to do this, it results in a 'race to the bottom'.
As highlighted in the first interim report, another submitter shared similar concerns:
I currently have 2 kids … I have to pay $335 per week in after tax income as child support. I earn $120,000 before tax, she earns $30,000 before tax … When you add in child support and benefits she gets from the government, we are on a similar income after tax … There is no incentive in this case for the primary carer to change their situation. On the other side, I am close to the point of taking a far less stressful job and earning less money as the same [principles] apply to me. The system actually encourages people to do less in terms of generating income. I am not suggesting my ex is taking advantage of the system, she is simply using what is available. What I am concerned about is that it leaves both parties in a vulnerable position.
The committee also heard from a number of payees who argued that there is no incentive for them to undertake overtime or a second job to improve their financial situation, as that additional income is counted as part of their child support assessment and results in them paying an increased amount of child support. For example, Mr Williams, told the committee:
Many men are paying their child support and they're doing second jobs to try to get a home so they can have access to their kids too, but they're fleeced on that too. The minute you do any overtime or anything like that, or take on a second job so you can buy a house, you get robbed by Child Support again. They're doubling up.
The Deputy Registered Officer of the Non‑Custodial Parents Party (Equal Parenting), Mr John Flanagan, said:
At the present time, the child support formula is a[n] open-ended formula and people do not have any incentive to try to get into work and earn money. They find that it becomes impossible to survive, so they leave work or they find some other way of avoiding child support.
In response to this issue with the assessment formula, Mr Flavel advised:
I'm not sure I would agree that it promotes underemployment. Some people suggest that, in some way, it discourages people from working, but I don't think those decisions will always—there can be a multitude of factors at play in the choices that people make about working, so how much they work. The sole motivation of reducing a child support liability, I think that might be a bit of a stretch.
Many submitters advised that they struggled after separation with the costs of establishing a new residence, often while still paying the mortgage on the family home and contributing to other expenses. As one submitter explained:
I've had to sell assets to assist with paying child support, my wage alone puts me in financial stress to pay Child Support alone.
Similarly, another individual advised the committee:
… it's causing me great financial and emotional stress and if I can't pay Child Support it will be deducted directly from my wages giving me no opportunity to meet other debts and obligations including feeding my son.
On this issue, DSS advised the committee that:
To recognise that parents may incur extra costs to re-establish themselves following separation, either parent may apply to have additional income excluded from their ATI [adjusted taxable income] for child support purposes.
This provision is available where the parent meets a number of requirements:
The parent must be able to show that they changed their pattern of earnings after separation from the other parent.
The exclusion of additional income cannot reduce a parent's ATI by more than 30 per cent.
Any exclusion of additional income is limited to the first three years after the most recent separation between the parents.
Prior to the separation, the parents must have lived together in a genuine domestic relationship for at least six months.
Parents may earn this additional income from a variety of sources, such as overtime, taking on a second job, investment income or a career change to a higher paying job. The parent must be able to show that the new pattern of earnings was established after separation and it would not have been reasonable to expect that income to have been earned, derived, or received by the parent in the ordinary course of events.
This provision is subject to a three-year time limit because parents will generally achieve greater stability in their arrangements the longer they have been separated.
DSS provided an example of how the exemption works in practice:
Amy has an income of $30,000 when she separates from James. After separation, Amy takes on a second job, increasing her income to $60,000. Amy can apply to have the additional income of $30,000 excluded from her total adjusted taxable income of $60,000 for the child support assessment. If the application is successful, the $60,000 can only be reduced by a maximum of 30 per cent i.e. a maximum of $18,000.
DSS further advised that:
The information is available on the Services Australia website. It's also available on the Social Services web site. In terms of notifying the customers, at the time of the initial assessment the assessment letter will refer them to the website for a range of information related to their income and to what they should and should not report, for example, and it links them to that information on the website.
Notwithstanding the above, it became apparent during many of the in camera hearings that a large number of individuals were not aware of this exemption.
The formula does not account for a parent's earning capacity
Some submitters raised the perceived unfairness perpetuated by the assessment formula when a parent opted not to work, or took a job below their potential earning capacity, resulting in a change to the child support assessment.
The committee subsequently sought further information from DSS in relation to how a change of assessment process works in these situations, and whether it considers both the payee and the payer's potential earning capacity. DSS provided the following additional information:
Under the change of assessment process, and upon application by either parent or the Child Support Registrar, Services Australia may base a child support assessment on the parent’s capacity to earn, rather than the parent’s adjusted taxable income, if all of the following criteria are satisfied:
the parent is not working despite ample opportunity to do so, has reduced their weekly hours of work to below full-time work, or has changed their occupation, industry or working pattern; and
the parent’s decision about their work arrangements is not justified by either their caring responsibilities or their health; and
the parent has failed to show that their decision was not substantially motivated by the effect this would have on the child support assessment.
These rules ensure that earning capacity decisions will not be made against parents who reduce their employment for genuine reasons, such as health issues.
This policy applies to both paying and receiving parents.
When considering a change of assessment application, the financial circumstances of both parents in the assessment will be investigated to ensure any decision made accurately reflects both parents’ true financial capacity and is just, equitable and otherwise proper in the circumstances.
In the context of this process, Services Australia may seek information regarding a business for which the parent works or has worked (which can include the business of the parent’s current partner), as this may relate to the parent’s capacity to earn.
The formula promotes unhealthy custody arrangements and non-compliance with court orders
Unhealthy custody arrangements
A common issue raised during the inquiry related to claims that the CSS incentivises parents to maximise their care for a child in order to increase the amount of child support to be paid by the other parent. For example, one submitter told the committee that:
Linking child support amounts depending on the number of nights a child spends with the primary carer creates an incentive for the primary carer to argue for restrictive time with the other parent as the more time they have with the child the more money they receive.
As noted in the first interim report, Dr Andrew Lancaster submitted that parents 'can get the upper hand on their ex by getting their income down and the amount of parenting time up', and Centacare Family & Relationship Services observed that parents may propose to spend more nights with their children in order to reduce the amount of child support paid.
On this issue, Springvale Monash Legal Service said:
… some of our family law clients are pressured to make children available to the other parent for additional time that may not be in the children’s best interests because of ‘care percentages’ in the formula prescribed by Child Support. Over a certain percentage of care by the other parent can reduce their liability to pay child support.
Some of our clients have instructed that the other parent has given misleading information to Child Support about the number of nights spent in each parent’s care, which can ultimately impact on the amount received by a parent for maintaining the children.
In his submission to the committee, Professor Augusto Zimmermann contended that the CSS provides primary caregivers with a perverse incentive to withhold the other parent's access to their child/ren so as to avoid a reduction in the other parent's child support obligation. He concluded:
In view of the financial reward acquired, it is no wonder the system actively provides a perverse incentive for parental alienation.
However, Professor Smyth argued that this may not be the major issue others believe telling the committee:
There's a lot of anecdotal evidence that, basically, everyone is running around trying to maximise their child support or maximise their care … We actually went to a national random sample of 5,000 people and we asked the question: 'Do you know the number of nights you need before you get a reduction in child support?' Many of those people said yes, and then we said, 'Okay, what's that number?' What we found was only one in 10 actually knew the correct answer, and people were far more likely to be wrong than they were right, which means you've got a bunch of people who think they know what the rules are and are purportedly running around gaming the system, and they might be fighting about something that's completely wrong. So around this idea that there's widespread bargaining, that everyone is running around trying to do the math and becoming petty accountants, the data suggests that that is not widespread at all.
Non-compliance with court orders
As highlighted in the first interim report, the committee heard from many submitters that non-compliance with court orders was, in their view, being rewarded by the current child support system. The committee heard on a number of occasions about one parent withholding the court ordered access to the child/ren from the other parent and then having the child support assessment amended to recognise that that parent now had 100 per cent care of the child/ren.
One confidential submitter said that anyone who does not comply with access rights handed down by the court should not be financially rewarded for their behaviour; they should, in fact, be penalised so as to discourage alienation.
Upon questioning by the committee regarding whether there is a lack of enforceability of court orders, Mr Williams responded by saying '[t]here is a terrible lack'. Given this, he highlighted the Lone Fathers Association of Australia's proposal that a child orders enforcement agency be created.
Professor Zimmermann also commented on this:
What amazes me is that so many parents have a court order and it is not enforced, even if the parent who is being alienated approaches the relevant authorities to seek assistance. It's regrettable that in this country we have court orders not being respected either by the child support agency or by the authorities that should be there at the beginning of this matter in order to enforce the rule of law.
Child Support Australia said:
It is essential that child support be made consistent with family law. Currently, parents who illegally withhold access to children are generally able to get away with it. That’s because the only available recourse is for the other parent to initiate further court proceedings, which is time consuming and often prohibitively expense.
Through child support reform, the incidence of parenting orders being broken could be greatly reduced.
Responding to this issue, Mr Flavel advised the committee that:
I think it's important to recognise that choices and decisions around custody are really matters dealt with under the Family Law Act. If one wants to step back from the child support system, it recognises the primacy of the Family Law Act in terms of that framework for decisions around custody and then builds the child support formula around that. As we've previously noted … there are elements of the way that the arrangements work that help to preserve adherence to those orders, so in some instances, where a parent is not complying with a court order, there is the ability to have the child support formula reflect the court agreed care rather than the actual pattern of care for up to 52 weeks in certain circumstances. That allows time for those parents to go through the family law system in order to deal with those issues around custody. I think it's important to recognise that the child support system is an administrative one that sits in concert with the Family Law Act but doesn't seek to influence outcomes around care.
Recognising this issue, in its second interim report the committee recommended the establishment of a National Contravention List to deal with parties breaching court orders in the Family Court of Australia (Recommendation 19). The committee's aim in recommending the creation of such a list is to assist these matters being heard within 14 days and, hence, achieve a more timely resolution for both parties. As stated by the committee in the second interim report, stakeholders to the inquiry noted that the success of court initiatives to address delays is dependent on appropriate and continued resourcing.
Following on from the committee's recommendation in its second interim report, the Family Court is establishing a National Contravention List to commence from 1 September 2021. This list will:
… emphasise the expectation that all parties will comply with orders of the Court, and that alleged breaches of Court orders will be taken seriously and will be dealt with quickly. The key objectives of the National Contravention List are:
a. to efficiently deal with Applications on a national basis in a timely, cost effective and safe way for all litigants;
b. for Applications to be given a first return date within 14 days of filing;
c. to ensure compliance with Court orders by all parties;
d. to impose appropriate penalties or sanctions where a contravention has been proved and where a party has failed to demonstrate they had a reasonable excuse for non-compliance with Court orders;
e. to proactively facilitate the resolution of underlying issues in disputes that lead to the filing of such applications;
f. to triage appropriate matters to dispute resolution; and
g. to be responsive to a party’s wishes to resolve matters without recourse to additional litigation.
The National Contravention List will operate in the following way with the emphasis on timely resolution (within 14 days for simpler cases and within 8 weeks for those requiring judicial oversight):
The National Contravention List will be administered by the National Contravention List Judicial Registrars. It will operate nationally and be conducted electronically. Applications will be considered by a Contravention Judicial Registrar within 14 days of lodgement. If the application is deficient or non-compliant with the relevant Rules of the Court, the Contravention Judicial Registrar may decline to accept the application for filing. Where an application is not accepted, a fresh application (rectifying the deficiencies raised by the Contravention Judicial Registrar) is required to be lodged for consideration by the Contravention Judicial Registrar.
Applications that are accepted for filing will be given a first return date before a Contravention Judicial Registrar as near as practicable to 14 days after the date of filing (save for those that are listed for final hearing within 8 weeks from the date of filing, which will listed to the Judge or a Senior Judicial Registrar).
A judicial registrar is able to take a number of approaches depending on the circumstances of the case, noting that 'the most serious contraventions will only be dealt with by Judges, and will be referred to them as quickly as possible':
a. Identify whether the respondent concedes that the orders have been contravened, or assert that they had a reasonable excuse for non-compliance with the Court’s orders; and, if the respondent intends to defend the application on the grounds of reasonable excuse, order that the respondent file and serve an affidavit setting out the evidence that they intend to rely on to establish the grounds;
b. Advise the parties, and the legal practitioners, of the costs, penalties and sanctions that may be imposed, including the possibility of personal costs orders, if the application is determined to be frivolous or without merit, or where the respondent is unable to demonstrate a reasonable excuse for non-compliance;
c. Refer the parties to participate in family counselling, family dispute resolution or other course, program or service pursuant to section 13C of the Family Law Act, particularly if parties have not attempted to resolve their dispute before filing the application, or where a section 60I certificate was not required prior to filing of the application;
d. In a parenting contravention, reaffirm the Court’s focus on the best interests of the children, and consider whether it would be appropriate to refer the matter to a Court Child Expert for the preparation of a Child Impact Report;
e. Identify whether there are ongoing proceedings and if so, discuss whether the issues outlined in the application can be addressed as part of those existing proceedings; and
f. Explore whether a resolution of the application is possible without the need for a trial, including assisting parties with varying the orders through negotiation or referral to other dispute resolution.
Importantly, the committee were informed that there are serious penalties for those who fail to comply with Court orders:
The consequences of contravening Court orders are set out Division 13A of Part VII in the Family Law Act 1975 and Part XIIIA of the Family Law Act 1975.
The remedies available to the Court range from the enforcement of an order to the punishment of a person for failure to obey an order. Depending on the situation, and the type and seriousness of the contravention, the Court may make orders, for example, that:
ensures the resumption of the arrangements set out in an earlier order;
compensates a person for lost contact time;
varies an existing order;
orders attendance at a post separation parenting program;
puts a person on notice that if the person does not comply with an order, the person will be punished;
requires a party to enter into a bond;
or punishes a person by way of a fine or imprisonment;
order payment of legal costs; and/or
order compensation for reasonable expenses lost as a result of the contravention.
Parties who fail to comply with Court orders without reasonable excuse may be subject to costs consequences and/or other penalties or sanctions.
Interim care provisions
This section discusses the interim care provisions of the CSA Act, which were originally introduced to promote compliance with court orders and care agreements and mitigate the issues raised above. As highlighted in DSS' submission to the inquiry, the Government's support guide summarises these provisions as follows:
If a person is being prevented from having the child in their care in accordance with the care arrangement without their consent, and they take reasonable steps to have the care arrangement complied with, there may be an interim period where care is determined by the care arrangement rather than actual care. If an interim care determination is made, the Registrar will determine 2 percentages of care for each party under section 51 of the CSA Act. The first percentage is the amount of care the person should have of the child under the care arrangement. The second percentage is the amount of care the person actually has of the child. The first percentage of care will apply during the interim period, which means child support (and FTB [Family Tax Benefit], if relevant) will continue to be assessed in accordance with the care arrangement for the interim period. The length of the interim period will depend on a number of factors. The second percentage of care will apply after the interim period has ended.
According to DSS, these provisions:
… aim to deter parents from contravening court orders and care agreements by withholding care of a child and to encourage participation in family dispute resolution. These provisions will not apply if there are special circumstances in relation to the child, such as where there is evidence of family and domestic violence.
An interim care period can only apply where a care arrangement (i.e. a relevant court order, parenting plan or written agreement) exists. An interim determination can be made where a person is being prevented from having the child in their care in line with a care arrangement without their consent, and they take reasonable action to have the care arrangement complied with.
The length of the interim period that can apply depends on the type of care arrangement, when the care arrangement was made, when the disputed change in care occurred, and whether the person with increased care is taking reasonable action to participate in family dispute resolution. The maximum length of an interim care period is 52 weeks.
The interim care policy is aimed at balancing the day-to-day needs of the parent with actual care and the additional expenses they are incurring, with the right of the other parent to seek to enforce a parenting order or other written agreement.
However, the child support system recognises a parent’s obligation to provide support for their child is not tied to the other parent’s compliance with a court order or care agreement. Child support is intended for the ongoing day-to-day financial support of the child. Once the interim period ends, it is important that care is recorded in line with the actual arrangements, so the children are not denied the financial support they need.
The obligation is currently on the person who is having care of their child/ren withheld to take reasonable action to ensure compliance with the care arrangement during the interim period. Failure to do so will result in the interim period ceasing on the day the reasonable action ceased.
Conversely, where the person withholding the care/with increased care takes reasonable action to participate in FDR, the interim period (generally 26 weeks) is reduced from the day they started taking reasonable action (to 14 weeks from that day if that is earlier than the 26 weeks). If they stop taking reasonable action to participate in FDR once this shorter period has ended but the maximum period is still on foot, a later interim period may apply.
These provisions were strengthened on 23 May 2018 through the
Family Assistance and Child Support Legislation Amendment (Protecting Children) Act 2018. This Act implemented three recommendations of the 2015 Child Support Report, including extending the interim period before an adjustment of child support is made in interim determinations. As summarised by DSS, the House of Representatives Standing Committee on Social Policy and Legal Affairs considered that:
… the previous 14-week period did not provide sufficient time for relevant legal proceedings to be completed, for prior agreed arrangements to be enforced by a court, or for revised arrangements to be agreed upon.
The Government agreed with this recommendation and 'increased the interim period for recently-made court orders and in situations where the person with increased care does not take reasonable action to participate in family dispute resolution'.
When questioned by the committee, Mr Flavel further clarified the objective of the interim care provisions, and provided a theoretical example, in relation to non-compliance with court orders. Specifically he said:
The point of the interim care order is that it would reflect what the court has ordered. As a hypothetical case, if the court had ordered fifty-fifty care, for instance, and one parent was withholding that—and this was a court order that had just been made, so within the first 12 months after it had been made—the parent who is being denied the care could apply to Services Australia and ensure that the child support payable works on fifty-fifty, regardless of if there was a 100 and zero per cent, say, operating. We think that's an effective way of ensuring that the child support arrangements act in concert with the family law arrangements, rather than sort of leading them.
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
Following long-standing concerns that child support payments were not adequately reflecting the costs of raising children, in 2004 the Australian Government formed an independent ministerial taskforce to review the CSS and, aided by a reference group, determine the costs of raising children in Australia. Prior to this review, child support payments were calculated as a fixed percentage of income.
In its final report, the taskforce recommended replacing the existing fixed percentage of income used to work out child support payments with a new way of calculating payments based on findings about the costs of raising children. These findings were that children from higher income families cost more than children from lower income families, and that costs vary according to the age and the number of children in each child support case. Acting on these findings, in February 2006 the Government announced key reforms to the CSS, which were implemented from 1 July 2008.
Notwithstanding these changes, a number of submitters to the current inquiry commented that the costs of the child set by Services Australia still do not accurately reflect the actual costs of raising a child in Australia, and called for a further review of how these costs are determined. For example, as highlighted in the first interim report, one submitter described the amount set by the costs of the children table as 'completely fictitious'.
VLA stated that the current formula has not been updated in over 10 years, and is 'set at a level which risks the capacity of single parents to meet the basic needs of children'. It also noted that:
The 2015 Parliamentary Inquiry into the Child Support Program recommended that the Australian Government should review the child support formula to ensure the adequacy of calculated amounts and equity of the program for both payers and payees.
Professor Smyth submitted that there was an 'urgent need' to update the cost of children table, noting that these estimates were done by a task force in 2004 and that a lot has changed since that time.
Although acknowledging that consumption patterns have changed since the cost table's introduction, Mr Flavel highlighted that it has been indexed each year to maintain its real value over time.
The costs of the children table does not scale with family size
Another issue raised during the inquiry related to the fact that the costs of the children table does not scale for families with over three children. Ms Edwards highlighted this issue for the committee and noted that, in effect, this assumption implies that caring for additional children in excess of three does not impose further costs on parents.
The costs of the children table scales with income
A recurring question asked during the inquiry related to whether the cost of raising a child in Australia increases with parental income, and there were varied opinions on this issue. For example, Mr Flanagan stated that he agreed with the proposition that child support payments should be based on how much it actually costs to raise a child in Australia, as opposed to the amount that a child's parents earn.
In contrast, when asked whether the amount a non-custodial parent earns changes how much it costs to rear a child, Ms Edwards advised the committee as follows:
It can … it's usually the patterns that were in play before a family separated which try to be replicated so that the child doesn't all of a sudden miss out on all the life opportunities they had when the family was together. We know that if children in Australia come from a lower-income family then they have fewer opportunities. We know that it builds if they're middle income and then it builds again for a higher income. So I'd argue that it's really what was in play before and that you'd really want to try for the children to maintain those.
On this issue, Mr Flavel referred to the original research undertaken in 2004 into actual family spending patterns. He told the committee:
The cost-of-the-children tables that were done back in 2004 were done on the basis of research undertaken under the auspices of the ministerial task force that was set up at the time. And they went and looked at evidence about costs of raising children and costs of raising children at different income levels, which … is why we have a scale that goes up with income and then, beyond a certain point, ends.
What the task force did was look at actual spending patterns, and it is the case that as incomes of parents rise the amount they spend on children rises …