Rod Kemp (Victoria, Liberal Party, Minister for the Arts and Sport) Share this | Hansard source

When a Carlton supporter speaks to me and asks for leave to present some information to the Senate I generally take a very conciliatory approach. But I commend your ruling, Madam Acting Deputy President; it was entirely correct.

To recap, just before the dinner break I was indicating that the figure that sets the cap on a liable parent’s adjusted income for child support purposes is also amended by the bill. The cap is designed to limit the possibility of child support being paid by high-income parents at a level that exceeds the actual costs of caring for the child. Consequently, this measure provides that a liable parent’s income will be assessed in a way that is more in line with the actual costs of the children and that is more consistent with the treatment of the payee’s income. This measure replaces the full-time adult average weekly total earnings figure with the all employees average weekly earnings figure. These changes will effectively lower the maximum amount of a child support payment by high-income liable parents because, to use the initials, the EAWE figure is lower than the AWE figure.

The bill also includes a measure that sets out further matters for the child support registrar or a court to consider when making a decision about a parent’s capacity to earn. The capacity to earn decision is one where the parent’s real income is not disputed but the decision maker considers that the parent has a capacity to earn at a greater level than is being exercised. Consequently the decision maker may decide to assess the parent’s child support liability as being at a higher rate.

Capacity to earn decisions have been amongst the most controversial in the Child Support Scheme, as many senators will know. This measure will improve the clarity and accountability of capacity to earn decisions. The new method of assessment is intended to be flexible enough to allow parents whose earning capacity has been assessed for child support purposes to make work and lifestyle choices in the same way as parents in intact families. This might include pursuing a different career or reducing work hours because of caring responsibilities.

However, it is important that parents whose earning capacity has been assessed do not deliberately choose to avoid or reduce their child support liability by changing their working patterns. The Child Support Agency can still decide, if a parent cannot show that he or she had an appropriate reason for his or her decision about work changes, to find a higher capacity to earn.

The bill also increases the maximum percentage of a child’s support liability that may be credited towards prescribed non-agency payments such as child-care costs or school fees. This is designed to give payers of an enforceable maintenance liability greater determination over how child maintenance money is spent. This measure provides that credit may now be given up to a maximum of 30 per cent, instead of 25 per cent, of the ongoing liability in any payment period.

Finally, the bill addresses a constitutional issue with the application of the Child Support Scheme to ex-nuptial children in Western Australia. The Commonwealth government has the power under the Constitution to make laws in relation to the children of marriage; however, in relation to ex-nuptial children, Commonwealth laws only apply if the states have referred their powers to the Commonwealth or adopted Commonwealth laws. Except for Western Australia, all the states have referred to the Commonwealth their power to make laws in relation to ex-nuptial children. Western Australia has chosen instead to adopt the Commonwealth child support legislation from time to time.

However, the Western Australian adoption acts have tended to lag behind the Commonwealth amendments. Consequently in the periods before Western Australia has adopted Commonwealth amendments two parallel child support schemes have operated: a pre-amendment scheme applying to ex-nuptial children in Western Australia and a post-amendment scheme relating to the up-to-date legislation applying to all other children in Australia, including the children of marriage in Western Australia. The bill’s amendments confirm the legal status of this arrangement and provide certainty to the families and children affected.

In conclusion, as I mentioned, this is a very important bill. It is one which has engaged the interest of a considerable number of senators, and we congratulate the senators on their contribution. My understanding is that there will not be any amendments moved in the committee stage, but I think I am able to say that the government will be looking very carefully at the contributions that senators have made in this chamber in their consideration of future policy initiatives in this area, which affects a large number of Australians.

Question agreed to.

Bill read a second time.