The recent minimal changes to child support legislation announced by Senator Jocelyn Newman on 30th September 1997, were put to Parliament for a 2nd reading on Thursday, 14th May 1998. Many politicians from both sides of the House, feel the changes have not gone far enough and have privately expressed their disappointment the amendments will not alleviate the difficulties paying parents have in servicing the high levels of child support demanded under the current formula.
However, Coalition politicians, surreptitiously rejected a proposal put forward by Tony Smith (Lib MP for Dickson) to replace the internal CS review process with an independent tribunal system. The Review Office (now called Departure Office) has come under severe criticism and a tribunal hearing held under the auspices of a magistrate would overcome many of these criticisms. A Tribunal would allow for evidence to be heard under oath, without the presence of solicitors/barristers and the legislation would enable a fairer determination of the level of child support needed, taking into account the current situation of both parties. A further significant improvement would allow the magistrate to consider whether contact (access) was being denied and take appropriate action to restore contact. (See Tony Smith’s speech to Parliament) (See detail of proposed changes to legislation to incorporate Tribunal hearings)
Claims have been made that this is the first time in 20 years a member of the government has gone against the wishes of the party by bringing forward their own amendments….and the government was faced with a dilemma, whether to vote against one of their own, leaving them open to claims of disunity as the opposition spokesman for CS, Kelvin Thomson alleged (See Kelvin Thomson’s Lab MP for Wills speech) or to allow their party members a conscience vote.
In an obviously planned move the coalition members absented themselves from the house at 5 pm when the Tribunal amendment was rescheduled for further discussion and vote. John Bradford (Ind. MP for Macpherson) (Go to John Bradford’s first speech) who supported the introduction of the Tribunal pointedly noted in a later speech on the day “there are no government members in the chamber, with the exception of the Minister for Customs and Consumer Affairs (Mr Truss), the parliamentary secretary and the member for Dickson”. (Go to John Bradford’s second speech)
Each and every coalition member of parliament should be asked to explain why they were not prepared to be present in the House to represent their constituents in this crucial debate and subsequent vote.
The Labour Party did not support the Tribunal idea with the exception of Roger Price (Lab. MP for Chiffley and Chairman of the Joint Select Committee in Child Support Inquiry), but he wanted to establish an internal appeal process before resorting to an external appeal, such as the Tribunal. (See Roger Price’s Speech). As you will read Mr Price was extremely critical of the minimal changes the Coalition have introduced asked the Parliamentary Secretary “Does he agree with the explanatory memorandum that Peter Costello and John Fahey through this child support amendment bill will in fact be between $26.2 million and $47.297 million better off. Is this what the Coalition government considers to be real reform in the child support area.”
Mr Price went even further and commented that the bill before the House should be referred to as a consolidated revenue measures bill rather than a child support amendment bill, noting “the big winners are not the children, are not the parents, but consolidated revenue presided over by the Treasurer and the Minister for Finance”.
These amendments do little to alleviate the problems for paying parents and some of the measures are going to make it much tougher…Every person, even those on pension benefits will have to pay a minimum of $5.00 per week for their children; income losses claimed legitimately through ATO negative gearing legislation will now be added back into the income used for child support assessment and the increase of 10% to the paying parent’s disregarded income will mean only $3-4 dollars will be put back into their pocket. That’s hardly going to “keep the wolf from the door” when one is left with as little as $30 – 40 per week after paying child support, tax and rent and one or two essential bills. That $30 – $40 dollars has to pay for food, clothing, transport and the cost of their children if they are lucky enough to have contact (access).
In an effort to sweeten these minimal changes the Government (Mr Miles speech) introduced a late amendment allowing paying parents to claim up to 25% of the monthly child support in other payments (Non-agency payments). If both parents agree to the NAP’s then 100% can be allowed. Currently under this system, the NAP form has to be signed by both parties and if the payee parent refuses to sign, the application will most likely to be rejected. Then it is a matter of making application to the review office (now called the Departure Office) which may or may not be successful. However, the new amendment places limitations on the items that can be claimed and we fear these may be carried over to all Non-Agency Payments. The items allowed are: fees charged at school or pre-school; essential medical and dental fees; payee rent including bond and body corporate charges; payee rates; payee mortgage; payee utilities; payee child care costs; payee motor vehicle costs, including registration, insurance, service, tyres, repairs and panel beating. There are many other items provided by the payer, yet it appears that if they do not fall within the above categories they may not be allowed Further problems may be caused if the 25% limitation is carried through to determinations made by the Departure office. Currently, non agency payments under Grounds 6, 7 or 9 can be 100% allowable. (See proposed legislative amendments)
Future changes on the drawing board are unlikely to be favourable to the payer and more in line with a money-grab to offset the high amount of family allowance payments that provide for the children of sole parents.
If a payer has persistently failed to meet his or her child support liability the Child Support Registrar will have the power to prevent departure from Australia. A Departure Prohibition Order can be applied by the Child Support Registrar and will not have a time limit, but will remain in force until the debt has been paid or satisfactory arrangements have been made. The imposition of a DPO will not need court approval.
Orders of this nature preventing an Australian citizen their freedom of movement, without judicial determination are akin to the worst human rights abuses in third world countries. What happens if the debt is in dispute or on appeal; will this prevent seamen, airline pilots and business men with overseas work contracts or commitments from continuing with their job and most importantly, who in the CSA will make the first determination that a payer has “persistently” failed to meet their child support liability?
Introduction of another inter departmental committee (IDC) will examine the diverse manner in which all forms of income are received, and taken into account for the purpose of child support assessments. The IDC will examine various sources of income available to payers and payees such as salary sacrifice, use of corporate structures, second jobs and overtime.
Some consideration is to be given to denial of contact (access), even though there is no direct legislative link between child support and contact. The Tribunal proposal would have provided this link. A small number of pilot services will be provided to offer immediate assistance to resolve the the conflict. Compulsory diversionary programs will be available for parents convicted for breaching an order. As you will be aware the Courts have been extremely reluctant to enforce their own orders if the offender is the mother, on the other hand if the father breaches an order he will likely find himself committed to jail. Instead of persuading the Courts to apply the same solutions for men and women these program will provide them with a soft option solution. It is to be hoped that both fathers and mothers will be treated equally and ordered to attend this compulsory counselling instead of applying the harsher penalties to fathers only.
Labour amendments proposed on the day (See Labour Amendments) (See Kelvin Thompson’s speech) concentrated on trying to reel in fringe benefits that could be added to the assessment income. A similar treatment was suggested for Non-Agency Payments, but with the percentage set to only 35% in the case where parties agree, instead of 100% as with the Government legislation. Generally, they supported the Government’s amendments and dismissed Tony Smith’s Tribunal concept.
The Government’s CSA task force chairman, Larry Anthony (speech)acknowledged the problems with the review process and undertook “to ensure that those people who are the actual review officers are not only properly qualified but also properly remunerated. Their remuneration is actually based on the success of the case, which tends to focus on quantity rather than quality”.
The basic problem with the child support legislation is the formula …. its application result in an unrealistically high level of child support. The recently released Cost of Children study prepared by the University of NSW would appear to set the necessary levels of child support at a much lower level. For more information on this subject go to http://www.ozemail.com.au/~divorce.
Tony Smith made mention of the higher Lee figures, based on “expenditure” and the lower Lovering figures based on “the basket of goods approach”. The higher Lee figures, often quoted in Family Court were used in the creation of the formula. (Go to Tony Smith’s 2nd speech). Analysis of the Lee survey raised the issued that expenditure does not equal cost and as Tony Smith so rightly points out “the problem with the expenditure survey approach is that it is said to be based on a regression analysis. Even in the expenditure survey approach we can see in the document references to the expenditure approach and then cost as if those terms were interchangeable—they are not. So inherent in the survey is an inherent defect.”
Even more worrying are Tony Smith’s ongoing comments “attempts to track down Mr Lee to find out exactly what that means have been unsuccessful. The document upon which it is based is at the moment unprocurable, yet the document is being peddled by the Institute of Family Studies and frequently forms the basis of orders by courts as to the amount of child support to be paid and government policy in this area.” (Go to Costs of Children for Lee & Lovering figures)
For your information we have put on line the complete events of Thursday 14th May. It makes interesting reading and provides insight into the real views and intentions of our politicians and political parties.