‘Deadbeat dads’ face fines in sweeping changes to child support

A crackdown on “deadbeat dads’’ who owe $1.4bn in child support will be recommended by the House of Representatives social policy and legal affairs committee.

It will propose that children’s maintenance money be quarantined if a parent spends it on drugs, alcohol, tobacco or gambling.

The cash would be subject to the same “income management’’ regime used to protect welfare payments, to ensure it is spent on children’s care. Sweeping reforms to the 27-year-old child support program will be recommended by the bipartisan committee, which is due to table its report in federal parliament today after assessing more than 11,000 public responses during a 16-month inquiry.

The report says separated parents should be forced to attend ­relationship counselling centres to negotiate child support arrangements. Domestic violence victims would be exempt.

But the committee believes that forcing parents into mediation will help avoid ongoing disputes over who should pay for costly items such as school fees, medical costs, orthodontics and clothing.

The existing child support payment scheme is based on a formula which reflects average costs, ­rather than the actual expenses ­incurred by each family.

The mediation sessions could also take into account the assets owned by each parent — so a parent who owns their home outright might pay more child support than one who pays rent.

The Child Support Agency would enforce any binding agreements reached through supervised mediation.

The current system of automatic payments, based on each parent’s earnings and nights ­caring for the children, would become a safety net for parents who fail to reach a private agreement.

The committee has recommended that extra taxpayer funding be given to the nation’s 65 Family Relationship Centres, which are already under strain.

The report suggests the Abbott government consider raising the “self-support’’ amount, now set at about $20,000, which the paying parent is guaranteed to keep.

It also requests a review of the official “costs of children’’ table, which the Child Support Agency uses to calculate payments, to ­assess if the amounts need to be ­increased.

The committee suggests that after-tax income — rather than gross income — be used to calculate each parent’s child support payments, to reflect the higher taxes paid by high-income parents. It highlights the problem of mothers who refuse to let a father see his children despite Family Court orders for shared custody. Under existing rules, the Child Support Agency can demand the father pay extra child support while the children are in the ­mother’s care.

The parliamentary committee has suggested that in such cases, the father be spared from paying extra child support until the custody dispute is resolved.

The 10-member committee, chaired by Nationals MP George Christensen, includes prominent Liberal backbencher Sharman Stone and Labor’s legal affairs spokesman Mark Dreyfus.

The committee took account of a submission by Australian National University academics Bruce Smyth and Bryan Rodgers, who have spent the past six years as chief investigators of a child support reform study funded by the Australian Research Council.

Their submission, made through the ANU’s Australian Demographic and Social Research Institute, suggests parents be given help to negotiate their own child maintenance arrangements.

“The most common complaints by parents (mostly fathers), especially those who have new families to support, are that they are paying too much, they shouldn’t have to pay child support when they can’t see their children, and that child support is essentially a form of alimony,’’ the submission states.

“By contrast, the most common complaints by parents eligible for child support (mostly mothers) are that payments do not cover the cost of children, payments do not occur or are irregular, old debts are not pursued, and the system can be manipulated to minimise or avoid child support obligations altogether.’’

The ANU submission says fathers are 17 per cent worse off financially after separation, compared with 24 per cent of mothers. Relationships Australia told the inquiry that warring parents were seeking shared care of children in order to pay less — or claim more — maintenance through the Child Support Agency. The agency transferred $3.5bn between separated parents to support 1.2 million children during 2013-14. A quarter of parents have an outstanding child support debt, totalling $1.4bn. The agency intercepted tax refunds to recoup $130m owed during 2013-14, deducted $29m through Centrelink payments and forced employers to withhold $64,000 from parents’ wages. It recouped $6.2m by imposing departure prohibition orders to stop 271 debtors flying overseas. But the parliamentary committee has recommended even tougher action, including fines, to force parents to pay their child support debts.

Men make up more than 90 per cent of parents paying child support.