australian experiences of child support administration and reform dr kay cook vice chancellor’s...

Australian experiences of child support administration and reform

Dr Kay Cook

Vice Chancellor’s Senior Research Fellow

Centre for Applied Social Research 2

Child support in Australia

• Prior to 1988-89, child support was obtained through the Family Court of Australia– The Family Court still determines property settlements

and child custody arrangements

• Problems with the court-based system:– only applied to married parents until the late 1980s– was costly and time-consuming for parents to access– caused conflict between parents– demonstrated little consistency between the amount of

child support awarded across cases– was poor at ensuring payment compliance

RMIT University©2014


The case for a Child Support Scheme

• During the Australian economic recession of the 1980s– welfare costs were escalating due to increasing numbers

of single parent families– research both within Australia and internationally

revealed the poverty experienced by children growing up in single-mother-headed households

• Reducing child poverty was a driving force behind the development of Australia’s Child Support Scheme alongside reducing welfare expenditure

(Fehlberg & Maclean 2009)



Australia’s Child Support Scheme

• Child Support (Registration & Collection) Act 1988– Established the Child Support Agency (CSA) now known

as the Department of Human Services – Child Support (DHS-CS) for the collection and transfer of payments

– Amended Social Security legislation to place emphasis on accessing private financial support from ex-partners• Child support does not directly reduce welfare benefits

• Child Support (Assessment) Act 1989– Introduced the child support formula to determine

assessment amounts for parents who separated or had children born after June 1 1989


The bureaucratic context

• The Child Support Agency was originally located within the Australian Tax Office (ATO)– Extended the ATO’s role from collecting tax from

wages to collecting child support– The ATO was uncomfortable with its new role in

distributing child support payments to recipients– This bureaucratic relationship only lasted until October

1988

(Edwards, Howard & Miller 2001)



Shifting responsibilities

• In October 1988, the CSA was transferred to the (now) Department of Social Services (DSS)

– The DSS was (at the time) responsible for both welfare service delivery and the associated legislation

• In 2004, the CSA was transferred – along with other service delivery agencies – to the DHS-CS

• While the DHS-CS is responsible for child support service delivery, it has no authority over child support legislation

• This is problematic for relaying service delivery issues back to policymakers



How parents can arrange child support

DHS-CS Collect• DHS-CS assessment of the amount to be paid • Money is paid to the DHS-CS and transferred to the

recipient• Recipients must manage the DHS-CS re non-compliance

DHS-CS Private Collect• DHS-CS assessment of the amount to be paid • Payments are transferred privately between parents• Recipients are responsible for managing non-compliance

Self Administration• Payment amounts are negotiated and transferred privately

between parentsRMIT University©2014


Payment experience

• Low income women in receipt of government benefits are required to use either DHS-CS Collect or DHS-CS Private Collect or they face reduced Family Tax Benefits (FTB)

• The amount of child support women expect to receive is used to calculate their FTB entitlements– Over 50% of parents transfer payments via DHS-CS

Private Collect– DHS-CS Private Collect payments are assumed to be

100% compliant (actual rates are unknown)



An unequal burden of responsibility

• Women can report a child support underpayment and have their Family Tax Benefits increased– this not well understood by women and not well

advertised by the DHS (Cook 2013)

• Even when women do know this, they often do not report underpayments due to:– fear of violence or threats to take children away– wanting to keep the peace with their ex-partner, or– hoping to increase the likelihood of future payments

• Women bear the responsibility for managing payments and arrears due to the impact on FTB



Public acceptance of the Scheme

• Child support is one of the most complained about social policies in Australia, particularly by payers

• Paying parents claim:– they pay too much– money is used by the resident parent rather than on

children

• Recipient parents claim:– minimum payments are inadequate (approx. ₩6700 per

week)– compliance is poor– seeking unpaid payments or reporting non-payment to

the DHS-CS places them and their children in danger


Australian child support reform

2003 Inquiry:Over 1600 submissions21 public hearings

2005 Taskforce

2006 – 08 Legislative Reforms

Policy outcomes of the Inquiry and Taskforce

2003 Inquiry Recommendations Policy Trajectory

Who stood to benefit?

1. Reducing the cap on payer parent’s assessable income (maximum liabilities)

2. Eliminating the link between contact and child support liabilities

3. Amending the calculation of child support on income from overtime and second jobs

4. Increasing prescribed ‘in-kind’ payments from 25% to 30% of the total liability

Realised in the 2006-08 legislative changes

Payers

5. Increase minimum liability from ₩249,000 to ₩498,000 per year

Revised downwards

Payees

(Cook & Natalier 2013)

Policy outcomes of the Inquiry and Taskforce

2003 Inquiry Recommendation Policy Trajectory

Who stood to benefit?

6. Cancel drivers/other licences for payers with arrears

Rejected Payees

7. Amending CSA enforcement powers:• Notified of insurance settlements• Collect from realised superannuation• Access joint bank accounts• Use credit reference information• Determine transfer of assets• Access lump sum payments• Collect child support from non-wage

earners (e.g. self employed)

Abandoned Payees


Public responses to the reforms

• Women’s groups and researchers have noted an imbalance in the outcomes of the reforms that favoured the vocal men’s rights lobby– Payers as a group were better off– Low income mothers on average lost ₩19,000 per week

• In contrast, men’s groups, researchers and politicians have suggested that the reforms addressed the gender imbalance that existed from the outset of the Scheme

• But single mother and children’s poverty persists, and in some cases was worsened



The importance of ‘public’ confidence

• Child support rates are not excessive for payers• Child support does not replace welfare benefits

– All child support money received by the DHS-CS is transferred to resident parents

– Fathers often want assurance that payments are spent directly on children, as a visible sign of their support

• But for mothers, child support does reduce the value of other, supplemental government payments– up to 45% of the value can be lost due to reduced FTB

• Reducing government welfare expenditure and appeasing fathers appear to have been prioritised over reducing child poverty



Recent developments

• Australia has again embarked on a Parliamentary Inquiry into the Child Support Program

• Aims to examine how to make the system ‘fairer’– methods to collect arrears and manage overpayments– whether the child support system is flexible enough– the alignment of child support and Family Tax Benefits;– linkages between Family Court (child custody) decisions

and DHS-CS policies and processes, and– how the Child Support Scheme could provide better

outcomes for high conflict families

(www.aph.gov.au/childsupport)



Child support research in Australia

• The DHS-CS do not release data for research purposes and only seldom partner with academics to recruit DHS-CS customers– Academic research has focused primarily on economic

winners and losers, not why parents behave as they do and how the system could better meet their needs

• Child support policy reform has occurred in a vacuum, which has contributed to the ongoing policy problems

• Strong research collaborations and data sharing are required to inform effective and publicly palatable reforms (Cook, McKenzie & Knight 2011)



References

Cook K (2013). Child support compliance and tax return non-filing: A feminist analysis. Australian Review of Public Affairs 11(2): 43-64.

Cook K, McKenzie H & Knight T (2011). Child support research in Australia: A critical review. Journal of Family Studies 17: 110-125.

Cook K & Natalier K (2013). The gendered framing of Australia’s child support reforms. International Journal of Law, Policy and the Family 27: 28-50.

Edwards M, Howard C & Miller R (2001). Social Policy, Public Policy: From Problem to Practice. Crows Nest, NSW: Allen & Unwin.

Fehlberg B & Maclean M.(2009). Child support policy in Australia and the United Kingdom: Changing priorities but a similar tough deal for children? International Journal of Law, Policy and the Family 23, 1-24.

Natalier K, McKenzie H & Cook K (2013). Women’s experiences of child support: Accounting for the financial and social dimensions of money. Paper presented at the International Symposium on Child Support, Canberra: Crawford School of Public Policy.



Other key sources

Australian Law Reform Commission (2011). Family violence and Commonwealth law: Discussion paper. Canberra: Australian Government.

Australian Law Reform Commission (2012). Family violence and Commonwealth laws - Improving legal frameworks, Final Report. Canberra: FaHCSIA.

House of Representatives Standing Committee on Family and Community Affairs (2003). Every picture tells a story: Report on the inquiry into child custody arrangements in the event of family separation. Canberra: Commonwealth of Australia.

Ministerial Taskforce on Child Support (2005). In the Best Interests of Children - Reforming the Child Support Scheme, Report of the Ministerial Taskforce on Child Support,. Canberra: Commonwealth of Australia.

Natalier K & Hewitt B (2010). “It's not just about the money”: Non-resident fathers' perspectives on paying child support. Sociology 44: 489-505.

Patrick R, Cook K & Taket A (2007). Multiple barriers to obtaining child support: Experiences of women leaving violent partners. Just Policy: 30-37.

Smyth B & Henman P (2010). The distributional and financial impacts of the new Australian Child Support Scheme: A 'before and day-after reform' comparison of assessed liability. Journal of Family Studies 16: 5-32.


australian experiences of child support administration and reform dr kay cook vice chancellor’s...

Documents

child support legislation

child support payments

child support formula

child support service

child poverty

child support agency

expartners child support

private financial support