This chapter deals with some broader issues of the future sustainability and public understanding of the Child Support Scheme, and with matters consequential upon the broad changes recommended by the Taskforce. Successful reform cannot occur without these matters being addressed, in support of the central recommendations. Matters relating to consistent treatment of the support of young people more generally complete the coverage of the reforms.
17.1 Suspension while parents are reconciled
Currently, if parents reconcile, the payer parent continues to be liable under an existing assessment until the payee parent advises the Child Support Agency (CSA) that she or he wishes it to end. If the parents separate again, having previously ended the assessment, the payee must apply for a new assessment.
Parents should be able to suspend child support payments when they get back together, but be allowed a period of six months before the child support assessment is terminated. Since the payer parent is making contributions in kind to the support of the child while the family is living together, his or her child support liability would be suspended. If the reconciliation fails, the payee parent can reinstate the assessment without having to make a new application. The assessment would only come back into force from the date the parents again separate, so that no debt accrues for that period.
Recommendation 22
22.1 Where parents reconcile, their child support assessment should be suspended during the reconciliation, such that no debt accrues for this period.
22.2 If the reconciliation continues beyond six months, the assessment should be terminated.
17.2 External review
An important aspect of providing a system that is well accepted in the community is to provide consistency and quality of result, with decisions subject to external scrutiny and independent review.
17.2.1 Review under the child support legislation
The child support legislation was originally designed without a signifi cant internal review system.
274 The Child Support Registrar had power of a limited nature to correct errors, but the predominant source of review was by appeal to the court. The Administrative Appeals Tribunal (AAT) was also given jurisdiction to review a limited number of decisions.
275 The review process has been extended several times, but always with the focus on internal rather than external review. The result has been piecemeal and the need for external review remains.
17.2.2 Recommendations of other Inquiries
Since its introduction, the Child Support System has been scrutinised by a number of specialist bodies, including three parliamentary reviews (as outlined in Chapter 2). Each body has concluded that an external review process should be established for reviewing CSA decisions.
The Child Support Evaluation Advisory Group (1992) observed that few appeals had been made under the original legislation, probably because potential applicants were discouraged by a perception of the high costs of legal representation. It recommended that an informal appeals process be established, before the Family Court Registrar or an Administrative Tribunal.
276The Joint Select Committee on Certain Family Law Issues (1994) recommended the establishment of external review process, independent of the environment and culture of the CSA, by officers appointed for this purpose by the Minister, with publication of all decisions (although without naming the parties). It envisaged this would operate alongside extensive review of all administrative decisions by a Child Support Claims Tribunal within the Registry of the Administrative Appeals Tribunal, with no fi ling fee.
277The Government responded by increasing the range of decisions for now mandatory internal review.
278 The ‘Objections’ procedure under new Part 6B
279 applied to most decisions made by the CSA, including Part 6A change of assessment decisions. However, external review has remained available only by appeal to the courts.
Despite this response, the 2003
Every Picture Tells a Story report highlighted continued concerns that the system was not providing an outcome that was perceived by parents to be fair, although the report did acknowledge that the internal review processes were an improvement on a solely court-based process. The Parliamentary Committee recommended establishing a proper external review process.
280A recent own motion report of the Commonwealth Ombudsman found signifi cant areas of concern with CSA decision-making, at least in the highly discretionary change of assessment process.
281 The continuing absence of an accessible administrative review process external to the CSA appears unsustainable.
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17.2.3 An alternative procedure
In discussing what process would be most appropriate, all reports have emphasised the importance of providing an expeditious, less formal and less expensive procedure.
A recent paper, ‘External Review of Child Support Agency Decisions: The Case for a Tribunal’ puts a case for review of child support decisions by the Social Security Appeals Tribunal (SSAT).
282 The paper argues that SSAT members already have some expertise in child support matters. Appellants to the SSAT currently comprise income support and family payment recipients, many of whom are also clients of the CSA. Given the significant interrelatedness of child support with social security, particularly Family Tax Benefit (FTB), the conduct of reviews by members with expertise in both areas may improve the quality of decisions. Although it may be necessary to make minor adaptations to the Tribunal’s procedure in order to handle child support matters, the paper concludes that it is well suited to take on this jurisdiction.
Currently, a parent who appeals to a court must bring their action against the other parent in an adversarial process. The legislation makes the carer and liable parent, rather than the Child Support Registrar, parties to the appeal.
283 The House of Representatives Standing Committee on Family and Community Affairs was particularly swayed by evidence before it in the family law context that the adversarial nature of the legal system as it currently operates amplifies animosity between separated parents, and looked to a more inquisitorial process for determination of disputes. An external administrative tribunal could review the reasons given for a decision by the Registrar, with the aggrieved parent as the other party, joining the other parent in the child support case if necessary. Inexpensive, expeditious external review in a non-court based, less adversarial, multi-disciplinary style fits well with the new approach that will unfold with the development of the Family Relationship Centres.
There are nonetheless some advantages in allowing the courts to deal with departure applications otherwise than as a review of a tribunal decision. These costs and benefi ts need to be fully explored, but it was outside of the Terms of Reference for this Taskforce to do so.
Recommendation 23
The Government should consider the introduction of an external mechanism for reviewing all administrative decisions of the CSA, either by establishing a new tribunal or by conferring jurisdiction on an existing tribunal.
17.3 Revision of the legislation
The child support legislation should be rewritten, as far as possible, in plain English. The current wording is highly complex and difficult to understand, with an excessive reliance on technical language and complex phraseology. Legislation of this kind must be usable beyond the agency entrusted with its implementation. Lawyers and other advisers, as well as courts, are significant users of the legislation and it is important to its utility that it be written without undue complexity.
This recommendation was also made by the Joint Select Committee on Certain Family Law Issues in 1994. It considered also that the two Acts should be combined into one.
284 The complexity of the drafting was criticised by the Family Court, the Family Law Council and the Law Council of Australia in submissions to the Joint Select Committee. The Joint Select Committee considered back in 1994 that there was an urgent need for the legislation to be redrafted, and it was the first recommendation that the Committee made.
285
Recommendation 24
The Child Support (Registration and Collection) Act 1988 and the Child Support (Assessment) Act 1989 should be replaced with new legislation written, as far as possible, in plain legal language.
17.4 Transition
Most of the recommendations of the Taskforce will need legislative amendment, substantial administrative change to the systems of both CSA and Centrelink, and extensive re-training and information dissemination. The legislative basis of the Child Support Scheme for unmarried parents in Western Australia creates further issues.
286The recommendations are mutually interconnected, and represent component parts of a unified reform. Piecemeal implementation may have unanticipated and undesirable consequences. Further, the definition and interaction of the elements of the proposed formula are conceptually different from the workings of the current formula. No measure standing alone will operate as an interim approach without changing the character of the full implementation. For example, Recommendation 1.3 sets a new, higher self-support amount. To implement this before introducing the new method for calculating income would result in change to some liabilities, which may be reversed once the complete formula is introduced.
Necessary administrative groundwork may delay implementation of the complete package. However, this is unavoidable. No interim change to the elements of the existing formula will duplicate the results of the balanced package the Taskforce is recommending. However, when the full package is prepared, the Government may wish to give consideration to the position of those whose liability or entitlement will vary to a large extent as a result of the recommendations, to avoid causing hardship in the short term.
Recommendation 25
The Government should recognise that full implementation of these recommendations will affect a range of existing child support clients, and should comprehensively consider the management of transitional issues, including the resources that the CSA will need to ensure an effective transition to the new scheme.
17.5 Public education campaign
The proposed changes to the Scheme will naturally require some explanation, mainly to clients of the CSA but also to others who have an interest in the Child Support Scheme, including legal and financial advisers. This provides an opportunity for the Department of Human Services to explain the practical implementation of the new scheme in positive terms and to draw a line underneath the negative associations of the existing Scheme.
One of the important aspects of the Scheme that needs better emphasis is its fl exibilities. Some of the dissatisfaction expressed towards the Scheme to MPs and others would be dissipated if clients of the CSA were aware of solutions that already exist, and which continue under the new scheme. The change of assessment process is particularly important (see Chapter 12). The grounds allow a lot of individual circumstances to be taken into account. The CSA also has a ways of dealing with changes in income during the course of a child support year. The provisions concerning Non-Agency Payments and prescribed payments are also significant ways in which payers’ concerns about the use of child support transfers can be addressed.
Recommendation 26
26.1 There should be a public education campaign to explain the changes to existing clients of the CSA, and adequate resources to deal with inquiries about the new arrangements.
26.2 A public education campaign about changes to the Scheme should include information about the flexibility of the Child Support Scheme, especially in relation to the grounds for changes of assessment.
17.6 The courts and the costs of children and young adults
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17.6.1 The Lovering and Lee Tables
When making an order for child maintenance, courts must consider the needs of the child given the child’s age, standard of living and any special needs, and may take into account findings of published research in relation to the maintenance of children.
287 Courts have been assisted by the research of Kerry Lovering and Donald Lee.
288 Lovering’s analysis priced a limited basket of goods, which provided a useful indication of how much parents would spend on their children if the child were to enjoy the benefits of those goods. Lee used the 1984 Australian Bureau of Statistics Household Expenditure Survey to estimate what parents were actually spending on children. Courts have preferred the Lee figures as representing a more accurate guide to the costs of children.
289Until 1999, the Australian Institute of Family Studies published updated fi gures to the Lee and Lovering Tables. In light of research that proposed new approaches to calculating costs of children, the Institute discontinued those updates.
290 Courts and practitioners continue to update the Lee and Lovering Tables using the Consumer Price Index and average weekly earnings fi gures, respectively.
The Taskforce was directed specifically to research the costs of children.
291 The Taskforce utilised three different methodologies to reach the best and most up-to-date estimates possible of the costs of children in intact Australian families (details are in Chapter 8). Apart from providing the most current information on the costs of children, the research results take account of government benefits in assessing how much ought to be transferred in child support.
Courts may only make a maintenance order for a child in relation to whom an application for administrative assessment could be not made.
292 To ensure equivalent treatment of children in both systems, courts should refer to the research relied on by the Taskforce and to the way in which government benefits are included in the calculations. This research ought also to provide the most reliable basis for decision-making if the costs of children need to be considered in the exercise of the court’s discretion when a ground for a departure application is made out. Given the age of the Lovering and Lee research now, and that it has been superseded by much more recent research, it is perhaps time for the updating of the Lovering and Lee figures to cease. This is, of course, a matter for the courts and legal publishers, rather than the Government.
Recommendation 27
The Federal Magistrates Court and the Family Court of Australia should utilise the costs of children research of the Taskforce as the basis for decision-making on child support issues, and should have regard to the impact of government benefi ts in working out the costs of children.
17.6.2 Child support for young adults
The parent of a child aged 18 years or over continues to be eligible for child support assessment only for a child in full-time secondary education, until the end of the school year in which the child turns 18.
293 The Family and Federal Magistrates Courts have a broader power, being able to make a maintenance order for a young person aged 18 or over if the court considers that maintenance is necessary for the child to complete his or her education or because of a physical or mental disability.
294When ordering maintenance for a child over 18, a court should consider the Taskforce research, particularly that relating to the costs of children, and base its calculations on the costs of the child, net of relevant government benefits such as FTB and Youth Allowance.
Recommendation 28
28.1 The Federal Magistrates Court and the Family Court of Australia should have regard to the Taskforce research on the costs of raising adolescent children, and any applicable government benefits, in working out child support liabilities in respect of young people over the age of 18.
28.2 The Government should consider the development of a formula or guidelines for the assessment of maintenance for young people over the age of 18 in circumstances where maintenance may be ordered under s.66L of the Family Law Act 1975.
17.7 Research and monitoring
Previous reviews of the Child Support Scheme have commented on the lack of relevant research. The Taskforce had available to it independent and comprehensive Australian research on which to base recommendations. However, many issues still remain unexplored, particularly given the fast pace of social change. Work needs to continue in this area.
The Australian Institute of Family Studies research program includes research into families and children after separation. Such research provides an essential background for the Government to make informed policy decisions and maintain the currency of the Scheme and its interactions with other areas.
The CSA has a number of means of receiving feedback from its clients and stakeholders. As part of delivering its service, the CSA is advised by the Registrar’s Advisory Panel. Many of the members of the Reference Group which supported this Taskforce participate in this panel, providing input and guidance on operational issues. A similar body with appropriate expertise needs to be set up to provide input and guidance to the Department of Family and Community Services on broader child support policy development and reform.
CSA also collects operational data that is published in its Annual Report. As discussed in Chapter 5, such data need to be more meaningfully and fully presented, particularly in the area of compliance, and of greater depth and scope to support ongoing policy monitoring. The Government should not be entirely reliant on published CSA data for its assessment of the operation of the Scheme.
The Taskforce is aware that ongoing policy analysis and monitoring of policy administration is crucial to ensuring policy settings that are responsive to emerging policy needs. In order to fulfil its policy responsibility for the current Scheme and to consider future development of the child support system, the Department of Family and Community Services should maintain an active area solely responsible for ongoing child support policy analysis and development and for monitoring the outcomes of service delivery by CSA.
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Recommendation 29
29.1 The Department of Family and Community Services should undertake or commission periodic updates to research on:
- the costs of children;
- the circumstances of payers and payees;
- the interaction of the Child Support Scheme with related policy on tax, income support, family payments, and family law;
- the impact of the Scheme (in combination with effective marginal tax rates) on workforce participation;
- compliance amongst CSA collect and private collect payers; and
- community perceptions of the fairness and effectiveness of the Scheme, and of the way it is administered.
29.2 The Department of Family and Community Services should take such steps as are necessary to ensure that it has a continuing expertise in child support policy and is capable of providing advice to Government on the operation of the Scheme independently of the data provided by the CSA.
29.3 The Department of Family and Community Services should consider the establishment of an advisory body to provide advice on issues of child support policy and on the impact of the Scheme. Such a body should comprise recognised experts in all relevant fields, including family law, family relationships counselling, child development, social and economic research, and taxation.
29.4 The Department of Family and Community Services in collaboration with the Australian Institute of Family Studies should promote research on and discussion of child support policy by such means as the provision of research funding, the organisation of conferences, and the promotion of dialogue with child support experts from other countries.
17.8 Currency of the Scheme
At the heart of the currency of the child support system is its capacity to respond to social change. Equally, it must respond to legislative change. Alterations to social security, tax or other legislation impacting on social policy may change the operation of the formula, creating undesired outcomes at points where two legislative schemes intersect. The formula must be monitored to ensure it keeps pace with these changes.
Recommendation 30
The currency of the Scheme should be monitored, with reference to signifi cant changes to child-related payments and in the light of ongoing research on child support issues.