Ms Catherine King (Ballarat, Australian Labor Party, Shadow Parliamentary Secretary for Treasury) Share this | Hansard source

The Child Support Legislation Amendment (Reform of the Child Support Scheme—New Formula and Other Measures) Bill 2006 implements the next stage of the government’s child support reforms. It does four main things: it introduces a much needed independent review of all Child Support Agency decisions by the Social Security Appeals Tribunal; it broadens the powers of the courts to ensure that child support obligations are met and it strengthens the relationship between the court and the Child Support Scheme; it allows separating parents more time to work out parenting arrangements before their family tax benefit is affected; and it introduces a new child support formula by which child support payments are calculated, with this measure to commence on 1 July 2008. These, combined with the previous changes to family law, represent the government’s response to the Parkinson review, In the best interests of children: reforming the child support scheme, and pick up on some of the recommendations of the report of the House of Representatives Standing Committee on Family and Community Affairs entitled Every picture tells a story: report on the inquiry into child custody arrangements in the event of family separation.

When speaking on the previous family law changes, I started by setting out the principles that are central for me in this debate. I want to reiterate those in my contribution today. Central to this debate, for me, is that it is the responsibility of both parents, whether they are living together or apart, to provide a loving, nurturing environment for their children to grow up in—one where they are safe, they are encouraged and they learn to develop into strong adults, free from fear and knowing that they are accepted and loved. Part of that responsibility requires that both parents take financial responsibility for the needs of their children. We must acknowledge that the impact on children of the separation of their parents should be minimised. The psychological and emotional stress that separations can cause is often compounded by the current child support regime. Any change to this that will reduce the negative impact on children deserves the support of both sides of the House.

Many of us who have worked in the welfare sector, and in our work as MPs, and see the cases that come through our offices know what a fraught and divisive issue child support payments can be. That children are caught in the middle of such wrangling is something that we must do everything in our power to avoid. These are some of the most difficult cases to work through, and there is often a great deal of emotion and anger involved in them. Not only do immediate and extended families have to cope with the emotional turmoil of a separation and the inevitable fallout of anger and emotion but, at the same time, they are expected to deal with and navigate an extremely complex child support system. Too often, issues about joint parental responsibilities get caught up in disputes about child support contributions. The feelings of fear that parents can experience when they engage in the current child support regime that they will be denied access to their children is all too real for many parents.

The occurrence of domestic violence in this country, linked to separation and financial issues, is well documented. It is important that women and children, who are overwhelmingly the victims of domestic violence, are supported not only through counselling and housing but also through navigating what is an extremely complex and potentially overwhelming child support system. These women and children are some of the most vulnerable members of our community, and any legislation that will enable a reduction in their stress is most welcome.

This legislation, in essence, attempts to provide a more realistic framework for avoiding such disputes. For the first time, there has been a very serious attempt made to estimate just how much it costs to raise children of different ages, and the child support formula in this legislation is designed to reflect that. I will mention some of the positive aspects of the formula before I go on to what I see as—and which have been highlighted by previous speakers—the major areas of concern. The new child support formula is based on recent Australian research on the costs of caring for children. It takes into account both parents’ incomes after equal self-support amounts are deducted, recognising care of the child for more than 14 per cent of the time and treating first and second families more equally.

The role of the Social Security Appeals Tribunal is being expanded to include independent review of child support decisions, providing a review mechanism that is inexpensive, fair, informal and far quicker. The family tax benefit part A maintenance income test is being changed so that payments are reduced only for those children in the family for whom child support is paid. Income definitions for certain tax-free amounts, with foreign income and fringe benefits used to calculate child support, on the one hand, and family tax benefit and childcare benefits, on the other, are also being better aligned.

Residential parents will get to keep all of their family tax benefit where a non-residential parent has care of their child for less than 35 per cent of nights in a year—that is, less than five nights a fortnight. Non-residential parents who have care of their child for at least 14 per cent of the time—that is, one night a week—will continue to be eligible for the rent assistance component of FTPA and will continue to be eligible for the healthcare card. Parents who have financial responsibility for a stepchild in a second family will now be able to apply to have the stepchild considered when calculating the child support for the parent’s first family if no-one else can financially support the stepchild.

I also want to focus on some of the more concerning aspects of this legislation. One of those is that we just do not know what the impact of the changed child support formula is likely to be on low-income sole parents. It is difficult to fully and unreservedly support these changes, given that low-income sole parents are already faced with so many structural barriers. Without comprehensive modelling that takes into account the impact of the government’s Welfare to Work changes and Work Choices and other social policies on low-income and sole parents, we cannot categorically rule out that this will not have a significant negative impact on these families.

Modelling undertaken for the Parkinson review showed that low-income families were most likely to experience reductions in child support payments under the new formula. In evidence before the Senate Standing Committee on Community Affairs, Professor Parkinson and the Australian Institute of Family Studies agreed that this was likely to be the case. However, they argued that for families on very low incomes, the cost of children is largely met through the family payment system, not necessarily through child support. The Minister for Families, Community Services and Indigenous Affairs’ own department has also been unable to produce any modelling or analysis that supports this claim.

It is ironic that at the same time as the government is engaged in rhetoric about reforming the welfare system it is now suggesting that low-income single parents should currently raise their children almost purely on welfare. This certainly is not a policy position that is supported in the wider community, nor is it one that the majority of single parent low-income families will be comfortable with. Further to this, the department has not proposed any measures to protect low-income families who may incur reductions as a result of changes in the bill. So the most vulnerable of the vulnerable are once again pushed to the side by the Howard government, and we are left with a bill that is half-hearted in its approach to reforming the child support system.

Single parent households are already the most financially disadvantaged group in our community. They can experience high levels of poverty, homelessness and often social dislocation. I am extremely concerned about the impact of these changes on this group of parents and concerned that the government and the department are not able to tell us with any confidence just what that impact is likely to be. It is absolutely the responsibility of the government to ensure that children in households adversely affected by the changes to the child support formula are actually looked after. This bill does not contain any provision for children in those households that are likely—not possibly, but likely—to be adversely affected by these changes. I am concerned that there appears to have been little thought given by the government to this.

I understand that there is to be a ministerial statement shortly, and I will conclude at this point. I seek leave to continue my remarks later.

Leave granted; debate adjourned.

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