In the Best Interests of Children - Reforming the Child Support Scheme - Report of the Ministerial Taskforce on Child Support 

Table of contents

• Letter of transmittal

PART A: Overview

1. Background to the Review
2. Terms of Reference
3. Approach of the Taskforce
4. A new child support formula for Australia
5. Assessing the costs of children
6. Taking account of regular contact and shared care
7. Ensuring parents meet their obligations to their children
8. Helping parents to agree
9. Other issues
10. Expected outcomes from the reforms
11. Recommendations

PART B: Background and Analysis

1. Establishment of the Child Support Review  
• 1.1 How the Taskforce conducted the Review
• 1.2 What was not in the Terms of Reference
• 1.3 The context of the Child Support Review—reforming the family law system
• 1.4 Explanation of terminology
2. The Evolution of the Child Support Scheme  
• 2.1 The issue of poverty in sole-parent households
• 2.2 Introduction in 1988 of the Child Support Scheme
• 2.3 Design of the Scheme
• 2.4 Reviews since the Scheme’s commencement
• 2.5 Changes since the Scheme’s commencement
3. The Formula for Assessment of Child Support
• 3.1 The process
• 3.2 Primacy of a parent’s responsibility to their own children
• 3.3 The basic formula
• 3.4 Definition of income
• 3.5 Care of children
• 3.6 Minimum and maximum amounts
• 3.7 The basic formula in operation
• 3.8 When the payer has other children to support
• 3.9 Payer with children with different carers
• 3.10 Carers with children of different liable parents
• 3.11 When the child is not being cared for by either parent
• 3.12 Treatment where both parents have care of their children
• 3.13 Shared care
• 3.14 When child support ends
• 3.15 Variation to assessments
• 3.16 Agreements
• 3.17 Changes of assessment
• 3.18 Appeal and review
4. The Interaction of Child Support with Government Payments to Families
• 4.1 The family payment system
• 4.2 Interaction of FTB with child support
• 4.3 Income support
• 4.4 2005–06 Budget measures
5. Evaluating the Scheme in operation
• 5.1 Financial impacts of the Scheme
• 5.2 Concerns about the Scheme
• 5.3 Compliance with child support obligations
6. Issues with the Current Scheme
• 6.1 Child support expenditure as a percentage of income
• 6.2 The Child Support Scheme and capacity to meet the costs of children
• 6.3 Child support expenditure and the ages of children
• 6.4 The Child Support Scheme and the costs of contact
• 6.5 Regular contact and Family Tax Benefit
• 6.6 Numbers of payers who have a minimum assessment
• 6.7 Non-lodgment of tax returns
• 6.8 Second families
• 6.9 The need for major change
7. Principles for a New Child Support Formula
• 7.1 No change to the fundamentals of the Scheme
• 7.2 Including both parents’ incomes in the calculation of child support
• 7.3 Changes in patterns of parenting after separation
• 7.4 Assessing the fairness of a child support formula
• 7.5 Gross or net income
• 7.6 Principles for a redesigned Child Support Scheme
• 7.7 Explanation of the principles
• 7.8 Trade-offs between principles
8. The Costs of Children
• 8.1 Relevance of the costs of children
• 8.2 Equivalence scales and estimation of the cost of children
• 8.3 Expenditure Survey approach
• 8.4 Budget Standards approach
• 8.5 Literature review
• 8.6 Taskforce estimates of the costs of children
• 8.7 The net costs of children
• 8.8 Larger families
• 8.9 Children in different age groups
• 8.10 Very high income families
• 8.11 Costs for separated families
• 8.12 Costs of contact

PART C: Detailed Recommendations

9. A New Formula for Assessing Child Support  
• 9.1 Overview of the proposed new formula
• 9.2 The income-shares approach
• 9.3 The measurement of income
• 9.4 The self-support amount
• 9.5 The Costs of Children Table
• 9.6 Determining a parent’s contribution to the costs of children
• 9.7 Regular contact and shared care
• 9.8 Splitting FTB
• 9.9 Determining the parenting arrangements
• 9.10 Variations on the basic formula
• 9.11 Minimum and fixed payments
• 9.12 Non-lodgment of tax returns
10. Improving Assessment and Enforcement of Child Support
• 10.1 Enforcement by the Child Support Agency
• 10.2 Court enforcement by payees
• 10.3 Powers of courts determining child support matters
• 10.4 Rights to seek CSA collection
• 10.5 Overpayments
• 10.6 Designated payments
11. Child Support and the Maintenance Income Test
• 11.1 The rationale for the Maintenance Income Test
• 11.2 Problems with the MIT
• 11.3 The neutrality principle
• 11.4 The terminology of maintenance
• 11.5 Reasonable maintenance action
• 11.6 Eligibility for income support of child support payers
12. Change of Assessment
• 12.1 The current change of assessment process and reasons
• 12.2 Limiting retrospectivity
• 12.3 Streamlining jurisdiction for court-ordered departures
• 12.4 High costs of contact
• 12.5 Overtime and second jobs
• 12.6 Recognition of responsibility for step-children
• 12.7 ‘Capacity to earn’
• 12.8 Reviewing change of assessment processes
13. Child Support Agreements
• 13.1 The importance of encouraging agreements
• 13.2 Agreements under the existing Scheme
• 13.3 The requirement of Centrelink approval
• 13.4 Centrelink approval as a safeguard
• 13.5 Protecting the taxpayer
• 13.6 A discretion to refuse registration
• 13.7 Other issues
• 13.8 Reforming the rules concerning child support agreements
14. Child Support and Re-Establishment Costs After Relationships Break Down
• 14.1 The issue of re-establishment costs
• 14.2 Taking account of re-establishment costs under the formula
• 14.3 Re-establishment costs and the use of lump sum child support
• 14.4 Overcoming the obstacles to lump sum child support
• 14.5 Lump sum child support as providing a credit balance
• 14.6 The need for legal advice
• 14.7 Administration of agreements or orders for lump sum payments
• 14.8 Jurisdiction to make lump sum child support orders
• 14.9 Crediting of other in-kind payments by consent
15. Child Support and the Family Relationship Centres
• 15.1 Interactions between child support, family law and parental conflict
• 15.2 The role of Family Relationship Centres
• 15.3 How Family Relationship Centres may contribute to the understanding of and compliance with the Child Support Scheme
• 15.4 Collaboration between Family Relationship Centres, the CSA, Centrelink and other organisations
• 15.5 Family Relationship Centres and change of assessment
16. Modelling the Outcomes of the Proposed Formula
• 16.1 The modelling tool
• 16.2 Child support outcomes by income level
• 16.3 Effective marginal tax rates
• 16.4 Contributions to the cost of the child
• 16.5 Cameo illustrations of the operation of the formula
17. Other Issues Related to Administration of the Scheme
• 17.1 Suspension while parents are reconciled
• 17.2 External review
• 17.3 Revision of the legislation
• 17.4 Transition
• 17.5 Public education campaign
• 17.6 The courts and the costs of children and young adults
• 17.7 Research and monitoring
• 17.8 Currency of the Scheme

PART D: Conclusion

18. In the Best Interests of Children
• 18.1 Outcomes of the proposed changes to the formula
• 18.2 The Child Support Scheme and the Best Interests of Children
• 18.3 Reforming the Child Support Scheme—a matter of principle
19. References
20. Appendices
• Appendix 1: Definitions and abbreviations
• Appendix 2: Membership of the Taskforce and Reference Group

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ISBN (Main Report): 1 920 85187 9

ISBN (Set): 1 920 85188 7

Third Printing

© Commonwealth of Australia 2005

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