Child support scheme – national financial disaster says Report

*High unemployment contributes to hidden costs of         $3,700 million p.a.

*Children’s weekly support payments decrease!

A report into  CSA The cost to the taxpayer – PIR confirms the child support scheme is financially, a national disaster and the hidden costs to the tax payer far outweigh any benefits claimed by the Child Support Agency.

Unemployment levels amongst payers, who are mostly fathers, have reached 39 per cent, representing 76 per cent of all unemployed males 20 years and over. (ABS statistics)

The average weekly amount paid to a child has reduced from $48.64 ($35.35 CPI index from 1990) under the previous system of court order to just $26.50 under CSA.

Direct costs of the scheme, including support for CSA unemployed liable parents has now reached $1,740 million per annum according to the report. Only $380.4 million pa is recovered by Centrelink as a result of the claw back based on the amount of support parents pay. For every dollar collected it costs the Australian taxpayer $2.80.

Men’s Rights Agency co-founder Sue Price said, “The scheme has failed on all counts to fulfil its primary objectives as specified by the government in 1986. It was supposed to ensure that work incentives were ‘not impaired’ and ‘adequate support’ would be available for children not living with both parents. Those parents would share the support costs according to their ‘capacity to pay’, not according to the oft used CSA determination of “capacity to earn”. The not so subtle changes away from parliament’s original intentions have resulted in fathers being forced to pay on the basis of income levels they are just not earning. Finally, the cost to the Commonwealth (taxpayer) was to be limited to the minimum necessary to ensure the needs of the children are met.

“Many fathers lose their jobs when going though family breakdown and cannot recover their position in the workforce. Others faced with the stress of mounting debt, caused by unrealistically high demands of child support are unable to keep their job or are forced into unemployment as the only alternative for their survival.” Men experiencing relationship breakdown, many of whom are involved with the CSA, are suiciding at the rate of 3 – 4 a day. If this was a case of women committing suicide at these levels there would be a national outcry. Yet, CSA even refuses to supply the number of payers who exit the system due to suicide! Ironically, they classify a change of this kind as a ‘terminating event!

“It is not a matter of fathers not wanting to support their children. The problem, especially for low income families, is being unable to support them whilst maintaining a minimal standard of support for themselves.

“The solution is not to invent more ways to punish liable parents for non payment when it is really a case of them being dead broke not deadbeat, but to provide a system that is based on both parents sharing the actual cost of caring for a child. The current system, based on a percentage ranging from 18% for one child to 36% for five or more children applied to gross income less a self support amount, is badly flawed. It is absolutely illogical to apply that percentage to all income levels. The higher the income the less the percentage expenditure becomes for any one item.

“Separation is not necessarily the reason why some single parent headed families live in poverty, as is frequently claimed. Many of these families were living in poverty prior to separation. There should be no presupposition that separation will alleviate that poverty, though increased special benefits to single parents and their children often mean they lose little in money and gain by not having another adult to feed and clothe.”

Author of the report, Managing Director of PIR Research Richard Cruickshank said, “We could not believe the extent to which the CSA, Centrelink and even the ATO went to in an attempt to foil meaningful independent research. Most of the community, including politicians, know very well there is a war of attrition going on out there between separated parents, but they may be unaware how badly the CSA is mismanaging the process. The problem is the Liberal Government has its head in the sand, because trying to fix Child Support equitably may make them unpopular with vocal minority groups with vested interests. In the end result they will be forced to fix it, because taxpayers will revolt when they find out the ‘real’ hidden cost.

“PIR conservatively forecasts that the cost of the scheme in its present form will continue to spiral, costing a further $55 billion over the next 10 years, which is about $5000 for to be borne by every hard working Australian taxpayer. END

The above press release was sent to all major metropolitan newspapers and main radio stations in Sydney, Melbourne and Brisbane. All have chosen to ignore the issue apart from the Canberra Times who ran a very small article.

The “lace curtain” has certainly been lowered on this story. Any information that challenges the existence of the CSA is off the agenda.