Ruth Webber (WA, Australian Labor Party) Share this | Link to this | Hansard source

My question is to the Minister for Human Services, Senator Ludwig. Can the minister please update the Senate on what the government is doing to support children of separated families by helping to ensure that child support payments are made in full and on time?

Joe Ludwig (Queensland, Australian Labor Party, Manager of Government Business in the Senate) Share this | Link to this | Hansard source

I thank Senator Webber for the question. It is a challenging time for all those who are involved in the child support system. All of those people will be aware a new, fairer and more balanced approach to assessing child support will start in one week’s time. The CSA’s compliance approach underpins the integrity of the scheme with a balance of education, support, advice and compliance activities. While the new system is a significant reform, it needs to be supported by a rigorous compliance framework. I think the compliance package I have launched today is an essential complement to the wider changes.

According to the Child Support Agency’s estimates, in the past four financial years there were more people who did not pay up and fully meet their obligations than who did. Child support debt is growing. In the past two years it has grown by over $50 million, at an average annual rate of 5.6 per cent. It is time to strengthen the scheme and seal the leaks.

The previous government promised in the 2006-07 budget measure it would yield $464 million in extra child support by 2010. This forecast collection target was published in the budget papers in 2006-07. I have now been advised that that target was wrong. The $464 million was based on four-year program funding, but not all programs were fully funded over the forward estimates and the intensive debt collection activity was funded for only three years. The previous government continued, of course, to use the uncorrected figures for intensive debt collection activities as late as April last year, although the correct targets were known in May 2006. On the advice provided to me, I think it is important to ensure that the record is corrected. The figures should have claimed $339 million in extra child support under the program funded in 2006-07, a shortfall in the order of $124 million.

Today I announced four new initiatives to enhance the CSA’s ability to ensure all child support payments are paid on time and in full. The first is a new project that will target a small minority of the Child Support Agency’s worst offenders, the optical surveillance program. This will be initiated when it is strongly suspected customers are deliberately attempting to deceive the CSA about how much income they actually earn. Today I also announced we are now formalising an important partnership with Insolvency and Trustee Service Australia. I am concluding a memorandum of understanding with ITSA to formalise arrangements between the two organisations and bolster collection efforts. The MOU means that the CSA can engage ITSA to seize and sell a Child Support Agency customer’s property in cases where the customer owes child support.

The third reform concerns a change in tax lodgement rules for child support customers. Under current arrangements the tax commissioner asks all paying parents to lodge a tax return. The introduction of the new formula has provided an opportunity to revisit these rules and refine them. I am advised that the tax commissioner will make a regulation under his delegated power to require all child support clients to lodge a tax return, unless of course they have a taxable income of less than $18,252 and they receive income support for the whole of the year. In addition, income-testing arrangements for assessing government financial assistance have not kept pace with the range of remuneration and investment structure options available to Australians. (Time expired)

Chris Evans (WA, Australian Labor Party, Leader of the Government in the Senate) Share this | Link to this | Hansard source

Mr President, I ask that further questions be placed on the Notice Paper.