Jenny Macklin (Jagajaga, Australian Labor Party, Shadow Minister for Families and Community Services) Share this | Hansard source

This bill is the next legislative stage in the government’s 2006 reforms to the child support system. The Families, Community Services and Indigenous Affairs Legislation Amendment (Child Support Reform Consolidation and Other Measures) Bill 2007 contains a significant number of technical and consequential amendments following from the original two pieces of child support reform legislation considered by the parliament last year. Labor supported these previous child support reform bills in the parliament, after expressing our reservations that the government had failed to provide protection for low-income families, who may lose income as a result of the changes to the scheme. Labor will support the legislation before us today. However, we remain concerned about protection for low-income families, which has not to date been adequately resolved. I move:

That all words after “That” be omitted with a view to substituting the following words: “whilst not declining to give the bill a second reading, the House expresses its serious concern that the Government’s child support reforms do not provide adequate protection against income reductions for low income households raising children”.

The bill also incorporates relevant amendments relocated from the Child Support Legislation Amendment Bill 2004, which Labor was intending to support. We note that the government is set to withdraw that bill from the Notice Paper and we are happy for that to occur. This amendment bill includes a range of non child support changes to various pensions and family payments, including the payment of the baby bonus in instalments to mothers aged under 18 years and the extension of the pension assets test, from 12 months to 24 months, following the sale of the principal home. Labor welcomes both of these initiatives. Not only are they good policy; they are also suggestions that we put forward in the first place. If the government continues to run out of fresh ideas, we are obviously keen to help.

The Child Support Scheme was, as I am sure everyone is aware, set up in 1988 by the Hawke Labor government, and it has become an international model and the basis of a similar scheme established in the United Kingdom. I do, however, acknowledge the genuine concerns about the scheme, including the fairness of the scheme, the assessment formula and, in particular, compliance. I reiterate that Labor acknowledges the need for reform of our child support system. The view we take to the reform challenge, however, is that fundamentally the interests and wellbeing of children must come first and that, as far as possible, child support policies should serve to support the child in secure and in economically acceptable conditions.

When it comes to child support, the reform process has been lengthy. The House of Representatives Standing Committee on Family and Community Affairs report Every picture tells a story dealt with child support and other family separation issues and made 29 bipartisan recommendations. Among its recommendations was the establishment of a ministerial task force to evaluate the Child Support Scheme, including establishing the costs of children’s upbringing after parental separation, recognising the different income levels of households and reflecting the costs for both parents of maintaining meaningful contact with their children.

The May 2005 report of the Ministerial Taskforce on Child Support, otherwise known as the Parkinson report, was the first systematic evaluation of child support arrangements. It recommended a new formula for child support assessment based on evidence of the actual costs of raising children, the shared parental responsibility for those costs and recognition of each parent’s level of care. The report examined the scheme, using sound principles, and it was generally well received. Labor believes that the report provides a constructive basis for moving forward on child support reform.

Last year the parliament passed two bills which implemented this new Child Support Scheme, including a new payment formula. While not all the recommendations of the Parkinson report were adopted and the new scheme was not entirely to our satisfaction, Labor did support those bills. As I said, today’s bill makes further amendments to the new Child Support Scheme. It is a lengthy bill, with 12 schedules and 178 pages, so I am not going to be able to cover all the amendments. But I do want to touch on, in particular, a number of issues which were raised in evidence given just last week at the Senate inquiry into this bill. The first issue is that these proposed amendments have not raised many new concerns—many of the concerns raised at the Senate inquiry were also raised when the original bill was debated. The second issue, which is perhaps related to the first, is that the new Child Support Scheme is still contentious and many of the previous concerns, especially with regard to the impact of the new regime, have not been fully addressed.

The Department of Families, Community Services and Indigenous Affairs, the agency responsible for child support policy, told the Senate inquiry that the implementation of the new regime is not progressing as smoothly as should be expected. The promised stakeholder reference group has met only once this year and there is still a lack of detailed information on the impact on families of the new formula and the new arrangements. Giving evidence at the recent Senate inquiry into the bill, Jaqueline Taylor, from the National Council of Single Mothers and their Children, said:

… calculating the financial impact on single mother families post July next year has actually been an incredibly difficult thing to do because there is nothing available to help us with that. There has been no modelling done by the government to actually calculate the impact that these changes will have on sole parent families and we cannot forget that this is also in conjunction with Welfare to Work and the loss of income from that.

So I ask the government to make this issue a priority and do the necessary research to look at the impacts of the changes that have been enacted. We believe that the government has a responsibility to make sure that the wellbeing of children is not compromised by the combined impact of these policy changes, especially the Welfare to Work changes. We acknowledge the concerns of many resident parents that they will receive lower child support payments under the new formula.

At the request of the ministerial task force, NATSEM modelled some of the impacts of the new formula. That modelling showed resident parents on annual incomes of $26,000 or less will incur the biggest reductions in child support payments. For example, where the non-resident parent earns $78,000, a resident parent with an income of $26,000 will be $50 a week worse off. That is certainly a lot of money for a parent earning $26,000 a year. These families are already amongst the most economically marginalised in the country. Ninety-one per cent of these families, according to the Child Support Agency’s own data, are headed by mothers. Only four per cent of these families have incomes over $50,000 a year and 75 per cent raise their children on incomes below $20,000. We know that supporting parents who are getting by without paid work or are managing on low part-time wages are frequently surviving on incomes well below the poverty line. So more account certainly needs to be taken of these issues, and we look forward to the research being done by the department.

It is also important that we look at these changes in the context of not only the new system that has been put in place but also the recent Welfare to Work changes that are having a big impact on many of these families. On the one hand, we have family law and child support law encouraging shared parenting and an acknowledgement that between 35 per cent and 65 per cent of care is considered to be shared. On the other hand, under the income support policies of this government’s Welfare to Work changes only one parent can be given principal carer status, and the important concessions in terms of activity requirements can leave the other parent and the children exceptionally vulnerable. I would like to quote Ms Taylor from the National Council of Single Mothers and their Children again. She said this about a case presented by the council to the Senate inquiry:

There is one in particular where a single mum in country Victoria has shared care of her toddler child, a very young child. She does not have principal carer status because her partner bullied her into making sure he got it. Centrelink assigned it to him. They have within the 10 per cent range of the fifty-fifty, so Centrelink have made their decision against her in favour of him. So she is what is known as a generic job seeker where she is on Newstart with child rate but has full-time obligations to look for work and to do anything that the Job Network requires of her to accept full-time employment. She has none of the protections that you get with principal carer status such as part-time work, no suitable child care available, the 60-minute travel rule—hers is 90 minutes. She has no access to a pensioner concession card, so she is in a seriously disadvantaged situation.

Labor is closely monitoring the impact of the intersection of the Welfare to Work laws, the importance of principal carer status, the promotion of shared care under family law and these child support changes to make sure that parents with largely shared caring responsibility are not disadvantaged.

I wish to turn to some other provisions in the bill. As far as the administrative review provisions are concerned, the bill makes technical changes to the process of administrative and judicial review of decisions in child support cases by the Social Security Appeals Tribunal—the SSAT—or by the courts. One of these changes concerns ‘out of time’ applications to the SSAT for a review of a child support decision. Currently the executive director of the SSAT has 60 days to make a decision about allowing such an application, and if the decision is not taken in the time frame the application is deemed to have been refused. This deeming provision will be removed by this bill and, according to the explanatory memorandum, the mechanism for ensuring timeliness in decision making will be left to ‘other mechanisms, such as the SSAT’s reporting requirements’. Clearly, the inflexibility of the deeming provisions could cause problems. However, relying on vague mechanisms such as ‘reporting requirements’ does not necessarily adequately address the issue of delays. The Law Council of Australia, in its submission to the Senate inquiry into the bill, expressed concern over item 64 of the bill’s schedule 1. This provision gives the SSAT the power to make a determination about which documents are relevant to the review of its decision by the court conducting that review. The Law Council is ‘concerned about the appropriateness of this amendment’ and believes it is preferable that the court be entitled to review all documents to determine which are relevant in a decision on the matter before it.

The bill also makes amendments to clarify situations when a court makes orders for the repayment of child support where payments have been made by a person who is not the parent of the child. Under these provisions a mere suspicion on the part of either parent that the payer was not the parent of the child is a factor relevant for the court to consider in making an order on possible repayment, even when this suspicion or knowledge falls short of a reasonable doubt about parentage. Another proposed section goes to the grounds for departure from the formula in relation to stepchildren. The new regime allows for the child support formula to be departed from where the family cares for a stepchild. Any consideration of the appropriateness of a departure in these circumstances requires consideration of the effects of such an order on the parents, the child support children and any other persons that the parents have a duty to support. However, currently the effect on a stepchild is not considered. The amendments will include consideration of the effect on the stepchild.

Schedule 5 deals with changes to the maintenance income test provisions in the A New Tax System (Family Assistance) Act 1999. These amendments will clarify the definitions of ‘amount received’ and ‘amount payable’ in the child support formula. They will also clarify that maintenance income received by a payee for one or more children will reduce the payee’s amount of family tax benefit part A above the base rate for those children only.

Currently ongoing child support can only be collected from employers if the payer is a wage or salary earner or they receive a Centrelink payment. This amendment in the bill today will broaden the agency’s power to issue notices requiring the deduction of child support and the forwarding of that deduction to the Child Support Agency to include cases where the payer is under contract for service arrangements that are, effectively, substituting for wages. This change effectively extends the reach of the ongoing collection system to independent contractors who are employees. Labor supports this change. Other aspects of the family payment system are also amended by the bill but, given the time available, I just want to indicate our support for those.

Another significant change in this bill, unrelated to child support, is to require that the baby bonus be paid in 13 instalments to parents under the age of 18. There is an unfortunate tendency for some to portray young mums in a negative fashion. I certainly do not support that sort of reporting. However, it has been noticed among some welfare groups and social workers that there have been disturbing occurrences of young mothers being abused and exploited over their baby bonus payments. Young women are in a position of special vulnerability when it comes to these issues. Some domestic violence services have reported levels of abuse rising sharply around the time the bonus is paid. Unfortunately, it is true that women are handing over the money just to get rid of a violent partner. There are far too many stories of young mothers being exploited for their baby bonus money. Governments have a responsibility to make sure that efforts to help families at a critical time are not misdirected by desperate or selfish people to have children they neither want nor care for.

On this basis we support the government’s changes to fortnightly payments for young mothers—something we have been pressing for. We also support the common sense change in the name for the maternity payment to be officially known by what we all call it—the baby bonus. All family payments will now also be conditional on the registration of the birth. Some people might find this amendment surprising but such a change will be helpful.

In their submission to the Senate inquiry, the Australian Bureau of Statistics said that the registration requirement would improve the accuracy of Australia’s demographic statistical collections. They said:

Births to mothers in their 30s are more likely to be registered promptly whereas births to younger mothers aged under 24 years were likely to be registered later. It is expected that the proposed requirement to have all births registered before applying for the baby bonus may result in a change in parents’ behaviour.

We hope that the change will be positive and that the tendency for late registration of births among those from very disadvantaged backgrounds will be reduced.

Of all births registered in Australia in 2005, 22 per cent of Indigenous births occurred in 2004 or earlier. So there is evidence in the Indigenous community of the need for this change. For exnuptial births, where paternity was not acknowledged or where a mother is not married and the father’s details are not on the birth certificate, over 23 per cent of births registered in 2005 were for babies born in 2004 or earlier. This new requirement must be implemented in such a way that those with particular vulnerabilities are not disadvantaged. We do not want them to be missing out on any payments and I hope that those responsible will make sure that the parents who are vulnerable know the full implications of this change.

The other Labor proposal that the government is adopting in this bill is an amendment to the Social Security Act and the Veterans’ Entitlements Act to extend the pension assets test exemption period, from 12 months to 24 months, following the sale of the principal home. Labor proposed an amendment to the Social Security Act in 2006 along similar lines to support pensioners who were unable to have their new home built during the 12-month period due to delays caused by the skills shortage. The 12-month rule was particularly affecting pensioners trying to build a new home and being delayed by the serious skills crisis that, frankly, is a responsibility of this government.

Under the current arrangements, a person has 12 months to sell their existing home and construct a new home before the proceeds of the sale of their existing home become an assessable asset. Because of the huge skills shortage and therefore the delay in building completion dates, a number of pensioners have been unable to get their home completed within the 12-month time frame. Stories of people waiting for tradespeople to turn up are very well known to everyone. Labor was concerned about the impact on pensioners of the delays that forced them to be caught up in these assets test rules. It now appears that the government has caught up, and I am pleased to see this change in this bill.

The changes to the remote area allowance are also welcome. The remote area allowance is a payment for income support recipients who receive no or little benefit from the income zone tax offset through the tax system. It is income- and asset-test free and paid at single and couple rates, with an additional rate for each dependent child. The child support reforms that take effect from July 2008 introduce the concept of a ‘regular care child’. That is a child who is cared for by a parent for at least 14 per cent and less than 35 per cent of the time. The bill provides for the rate of remote area allowance to be increased by an additional allowance for each regular care child in a family in addition to each FTB child. So it does provide extra support to families, and it is welcomed by Labor.

We also support the changes to allow family tax benefits to continue to be paid to members of the Australian Defence Force and members of the Australian Federal Police International Deployment Group who are deployed overseas. Normally FTB is only payable at the full rate to people temporarily overseas for up to 13 weeks. Discretion to extend that period exists where certain prescribed events prevent or delay their return. Presently, ADF and AFP personnel on overseas deployment are not covered adequately by this discretion. This bill makes amendments to rectify that deficiency.

So, as I have indicated, Labor supports this lengthy amendment bill. However, I do want to reiterate our serious and ongoing concerns with the impact of the new Child Support Scheme on low-income families.

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