The analysis presented in this section is based on actual child support liability changes for 700,100 cases. The cases used in this analysis are those that were previously presented in the July analysis, that are still current cases in the December dataset. All cases included are registered with the CSA and have their child support liabilities assessed using the administrative formula.
The analysis does not reflect the amount of child support that will be transferred or the FTB that will be paid. It is limited to child support liabilities under the new formula and the FTB payable based on these liabilities. In practice, many paying parents are not compliant with their child support obligations. However, CSA data also shows that approximately 87 per cent of CSA Collect customers pay some child support, and approximately 65 per cent of CSA Collect customers pay more than 75 per cent of their liabilities in any financial year.
Differences between this analysis and the previous report (August 2008):
- The previous analysis compared projected 30 June 2008 liability (and modelled FTB) with the projected 1 July 2008 liability (and modelled FTB). This provided a comparison between pre-Stage 3 and post-Stage 3 outcomes.
- The current analysis compares the 30 June 2008 liability (and modelled FTB) from previous analysis with the 31 December 2008 liability (and modelled FTB). This provided a comparison between pre-Stage 3 outcomes and outcomes six months after the reforms were introduced.
Some reasons why the current analysis differs from the previous analysis include:
- more paying parents are being assessed on a higher default income, than was the case previously;
- more recent income details are used due to new child support periods having commenced between 1 July 2008 and 31 December 2008;
- more parents have relevant dependants;
- care arrangements have altered during the first six months of the scheme;
- more children over 13 years of age resulting in higher child support and FTB (as six months have elapsed and the same cohort is being examined in both analysis). This will affect around 35,200 cases;
- more children are over 5 years of age resulting in less FTB Part B being paid (as six months have elapsed and the same cohort is being examined in both analysis). This will affect around 16,700 cases; and
- more children are over 16 years of age resulting in less FTB Part A being paid – 12,700 children turned 16 between July and December 2008 and remained in the FTB system. As the datasets are based on a point in time it is not known how many cases have been affected by a child turning 16 and leaving the system by moving onto Youth Allowance.
Limitations of the information presented are as follows:
- Approximately 44,000 cases were excluded as they were reciprocal cases with a nil liability. These records are registered for administrative purposes and were not affected by the change to the formula.
- Paying parents and receiving parents may be involved in more than one child support case. For example, they may be paying more than one person, receiving child support from more than one person or paying one person and receiving from another. This means that there are fewer receiving parents than cases and fewer paying parents than cases.
- From the dataset used for the modelling, (ie the 700,100 quoted above), there are 41,000 cases in July that did not have a matching December case and 56,000 December cases that did not have a matching case in July.
Data rules used in model:
- the CSA data includes parents whose child support is collected privately or collected by the CSA;
- the analysis was based on data extracts from December 2008. Therefore, the modelling reflects paying parents' and receiving parents' circumstances on this date. Accordingly, any changes to receiving parents' or paying parents' circumstances after this extraction are not reflected in the modelling;
- the FTB outcomes are modelled using 2008-09 rates, thresholds and income estimates and are based on those parents who claimed FTB, not those who were entitled to claim but did not;
- where adjusted taxable income information is not available, child support income is substituted;
- gross fringe benefits were used in the modelling of FTB; this means that the recent change to continue basing FTB on net fringe benefits rather than the gross fringe benefits is not reflected in this model;
- data held in the CSA system is used to populate the child support liabilities and data held in the Centrelink system is used to calculate the FTB outcomes. The information held in these systems may differ for items such as shared care details; and
- income support recipients are identified using the CSA flag. The flag is generated from the CSA daily interface batch with Centrelink.
Data terms and reporting:
- numbers and percentages may not add to totals due to rounding;
- for the paying parent and the receiving parent, the figures represent the changes in child support liabilities and modelled FTB outcomes. This means that 'net loss' and 'net gain' for the paying parent reflect changes in both child support liability and modelled FTB outcomes. The terms 'receive less' and 'receive more' for the receiving parent refer to the combination of changes in child support entitlement and modelled FTB outcomes;
- as a result of Stage 3 of the Child Support Scheme Reforms, approximately 1,900 receiving parents became paying parents under the new rules and 2,400 paying parents became receiving parents under the new rules. This reversal of roles between these paying parents and receiving parents has resulted in these parents appearing to receive substantially more or paying substantially less;
- this modelling reflects Stage 3 of the Child Support Scheme Reforms. Therefore reforms implemented in Stage 1 (1 July 2006), such as the income cap reduction or the minimum payment measures, are not reflected in this model;
- all outputs from this model incorporate large scale rounding. Generally, numbers are rounded to the nearest 100 and percentages are rounded to the nearest whole per cent;
- paying parents and receiving parents may be involved in more than one child support case. For example they may be paying more than one person, receiving child support from more than one person or paying one person and receiving from another;
- the model does not take account of the effects of other changes in taxation arrangements, government benefits, or growth in earnings; and
- it is not possible to present separately the impact of one aspect of the changes to the formula (such as level of care or age of children) independently of the others.