Wimping on child support – 1997

Tuesday morning it was front-page news. The Melbourne Coroner heard the sad story of a man who hanged himself in a police cell after two years of being denied access to his three children. One more victim adding weight to the continuing public concern about gross inequities in the treatment of non-custodial parents after divorce.

By the end of the day, the Howard Government had struck another blow to the campaign promoting the rights of non-custodial parents. In announcing changes to the Child Support Scheme, it wimped out.

Far from the sweeping reforms promised by the Liberals before election, the Cabinet proposals approved by the Coalition joint part room, tinker at the edges, failing dismally to address major concerns of critics of the scheme.

Mr Howard railroaded the proposals through the party room against heated opposition from members of the backbench committee set up earlier this year to lobby for changes to the scheme. The backbenchers are all too aware of growing frustration at the failure of successive governments to respond to recommendations made by the Joint Select Committee on Certain Family Law Matters (JSC), a bi partisan parliamentary committee which investigated the scheme three years ago.

One major concern of the JSC was that under the current formula underpinning the scheme, the custodial parent often fares well at the expense of the non-custodial parent, who may well end up impoverished. Men with second families earning between $20,000 and $25,000 per year often find themselves with up to $500 per month less disposable income than their first families.

Tuesday’s proposals do little to rectify the situation. There’s a measly $901 increase in the amount of “exempted income” for self-support for non-custodial parents. It’s unsurprising that the backbenchers are up in arms at being forced to return to their constituents with a mere $17 a week relief from onerous child support payments. This is half the percentage increase recommended by the JSC.

Equally, the proposals fail to bite the bullet concerning the high level of disregarded income for custodial parents.

This is the amount the custodial parent can earn before any reduction in the non-custodial parent’s child support payments. The Government proposal cuts this from $37,424 to $29,598 – more than $10,000 less than suggested by the JSC. And contrary to the JSC recommendations, custodial parents can still apply for child-care fees to be added to disregarded income.

But there will be just as many custodial parents who will be appalled at the Government’s failure to address their concerns – particularly women whose ex-husbands are self-employed and in a position to minimise their taxable income. Cabinet’s only response to their plight has been to add excluded net rental property losses and exempt foreign income to the parent’s taxable income used to determine child support liability.

And there is no mention of strengthening the enforcement provisions to ensure compliance with required payments and penalties for income minimisation. Yes, there are some good moves – like the requirement that all non-custodial [parents, including those on the dole contribute a minimum of $5 a week for their children’s welfare. Also, fathers with second families can now claim 50 per cent of any child support as a deduction from the household income used for determining family payments and child care-assistance.

Finally, the Government is encouraging parents to escape the clutches of the Child support Agency – a smart move since, by some estimates, the money recovered by it is less than half the costs of administration.

But, there are other areas of concern which have not been addressed – such as reform of the much-criticised review system by introducing some predictability to the process through public access to published decisions and the introduction of a less costly system of appeals.

Given that the previous Labour government also had a dismal record on reforming child support, it will be interesting to see whether the Opposition will now take on some of the tough decisions by moving appropriate amendments when the legislation is introduced into Parliament. A Labour taskforce of relevant shadow ministers is soon to meet to plan strategy.

Yesterday, the Government announced that even these feeble reforms will not be implemented before 1999. But try as successive governments might to duck and stall, this hot issue is not going to go away.