Louise Markus (Greenway, Liberal Party) Share this | Hansard source

In speaking to the Child Support Legislation Amendment (Reform of the Child Support Scheme—New Formula and Other Measures) Bill 2006, I would firstly like to acknowledge all the hard work of honourable members who have worked in a very bipartisan way to achieve the best outcomes for the people involved in families affected by separation and divorce. Many families do not desire these situations; it is not a choice that they would automatically make. Many people join together in marriage because they are committed and desire to have a healthy family life and a future. But, because of circumstances often beyond their control, and at times due to challenges that individuals within that family face, the decision to separate and divorce comes about, resulting in the children being impacted in many ways.

This bill is important in providing change and implementing structures that will make it much easier for families. It reflects the government’s strong commitment to continued overhauling of the child support scheme. This legislation will provide the means for these reforms to move forward. This work has come about largely, as I have mentioned already, due to the House of Representatives Standing Committee on Family and Community Affairs and their report on child custody arrangements, Every picture tells a story.

When that report was first released I was working as a private practitioner, working with many families who were experiencing divorce and separation. At that time, I was writing reports for the Family Law Court, often appearing on behalf of families and endeavouring to communicate the best interests of the children. In reading Every picture tells a story, the thing that stood out to me was that, wherever possible, we need to encourage families and couples to work out the decisions about residency, access and division of property between themselves as much as possible. I saw many families who had spent tens of thousands of dollars in the Family Law Court endeavouring to come to a decision. In the process, often grandparents had to remortgage their homes.

The committee recommended that a ministerial task force be established to examine the Child Support Scheme. This task force was chaired by Professor Patrick Parkinson. The task force concluded that these reforms were required. Stage 1 of the reforms has already taken place this year. The bill will provide the legislative basis for stages 2 and 3 of the ongoing reforms. Each stage of the reform process will enable the Child Support Scheme to better work in the best interests of children and better balance the interests of parents, while also reflecting community values.

The main purpose of the reforms is in line with the government’s new family law system, which aims to encourage shared parenting and to reduce conflict. This bill better recognises the importance of both parents remaining actively involved in their children’s lives after separation. I have spoken with many children over the years and have found that, while there may be conflict between their parents, they require and desire to have a relationship with both parents. I need to acknowledge at this point, though, that there are exceptions. Of course, changes to the Family Law Act have acknowledged that—that is, that, where there is actual violence and abuse, the children are protected.

The other main aspects of the reforms include: a new child support formula; external review of the Child Support Agency; better arrangements for parents who want to make their own agreements about child support; improved interaction between child support and family benefits; recognition of the extra costs of setting up new homes after separation by allowing income from overtime and second jobs for this purpose to be excluded for three years; and recognition of step-children where no-one else can financially support them.

As the Child Support Agency now has 1.3 million parents who are registered and nearly 1.1 million children who benefit from receiving child support payments, there is no doubt about how important these reforms will be to both parents and children now and in the future. The aims of these changes are to provide and deliver a system that acts in the best interests of both children and parents. Above all, these reforms are about ensuring that Australian families are supported throughout the process.

From 1 January 2007, the role of the Social Security Appeals Tribunal will be expanded to include independent administrative review of Child Support Agency decisions. This independent review is critical. This will ensure a review mechanism that is inexpensive, much fairer, more informal and speedier. It will also improve the consistency and transparency of child support decisions—something that parents have been crying out for. This process will broadly mirror the process currently available for Centrelink decisions about the family tax benefit and other payments, which a large proportion of child support parents would already be familiar with. Families who are already facing new situations that are filled with uncertainty and challenge must have a system that is reliable and which will be able to support them through the process of appeal.

Another fundamental element of these reforms is the new formula for calculating child support, which is based on new Australian research on the costs of children. This is the first time we have used expert Australian research on the costs of raising a child. This new formula will take into account both parents’ incomes, how costs change with income increases and how costs are borne when the child spends time with both parents. The income of each parent will be treated in the same way, with the same self-support amount applied to each and will take into account that children cost more when they are teenagers and less when they are younger. Furthermore, first and second families will be treated more fairly, as the allowance made for them will be worked out in the same way as the costs of the children for whom child support is paid. All care that is between 14 and 34 per cent will receive the same credit of 24 per cent of all the costs. This was recommended by the task force, based on their extensive research on what parents with this level of care need to spend. This will cover most of the regular contact arrangements and will remove the financial incentive for parents to argue about small changes in care, thus removing another point which may create conflict between parents.

This bill also introduces the new arrangements for parents who wish to make their own arrangements about child support. It is critical that this system, with these changes, provides for greater flexibility for parents to talk and work things out with one another. Critically, this will remove the need for high costs for parents, for children and also for the taxpayer. There will be two types of agreement: binding financial agreements and limited child support agreements. Binding agreements will provide a greater level of certainty for parents. They will also require parents to obtain some legal advice. This is primarily because these arrangements can provide less than the formula would have provided. Limited agreements, however, will not require legal advice and will ensure that children have adequate financial provision. This type of agreement will also be easier to end, should the parents’ circumstances change.

Other changes that will further ensure that adequate financial provision for children is guaranteed include the following. Where parents have more than 65 per cent of care of a child, they will keep all of the family tax benefit for that child. The costs that the other parent bears during contact will be recognised through the Child Support Scheme. This will make the system much simpler and there will be less financial reason to argue over care arrangements—again, eliminating or reducing conflict. Also, for non-resident parents who are paying the minimum amount of child support, which is around $6.15, and who have more than one family with children, this amount will be payable to each of those families, rather than in the previous situation, which was to divide that amount between the families.

Parents who deliberately minimise their income to avoid paying child support and who claim to have very low incomes but who actually have higher real incomes or resources will have to pay $20 per child per week unless they can prove that their incomes are in fact very low. In addition, parents will be able to have income from second jobs and overtime excluded from their child support calculation when they can prove that the extra money they are earning is used to help with re-establishment costs. This will be very beneficial to people who are setting up new families and want to ensure that, with the additional pressures, the second family, the second relationship, is successful.

With more than 20 years of experience of working with families who have experienced separation and divorce, I know that these changes will make the Child Support Scheme more flexible, more transparent and a lot fairer. I indeed welcome the focus on children. I also welcome parents being supported and assisted not only during the separation period but in the longer term. The encouragement for parents to work on the arrangements and make decisions about their children with regard to this and other arrangements across the family law system is indeed a welcome change. I commend the bill to the House.

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