This report compliments the August 2008 report, which provided population-level impact of changes to the Child Support Scheme that took effect on 1 July 2008, based on the combined outcome of the child support and Family Tax Benefit (FTB) changes. Financial outcomes of the child support changes cannot be viewed in isolation from FTB. This is partly because changes in the amount of child support received may alter the amount of FTB payable, and partly because the reforms to the child support system included important changes to FTB eligibility rules.
A key objective of the child support reforms is to improve compliance with child support obligations. This includes not only ensuring that parents pay their full assessment on time, but also that the assessment is an accurate reflection of a parent’s capacity to pay. With this in mind, the Child Support Reforms provided additional resources for enforcement activities which, to date, has yielded $235 million in extra child support since the measures began in July 2006. From 1 July 2009 the Child Support Agency has been provided with a further $223.2 million to maintain customer service standards and address the build up of child support debt.
The report released in August 2008 compared actual new child support assessments effective at 1 July 2008, and modelling of the FTB that would be payable on the basis of these assessments compared to actual child support assessments effective at 30 June 2008, and modelling of the FTB that would be payable on the basis of these assessments. This report was more reflective of the impact of the reforms as parents’ income, care arrangements and for almost all the age of their children remained static for this analysis.
This report examines actual new child support assessments effective at 31 December 2008, and modelling of the FTB that would be payable on the basis of these assessments compared to actual child support assessments effective at 30 June 2008, and modelling of the FTB that would be payable on the basis of these assessments.
This analysis examines the circumstances of individuals six months after Stage 3 of the reforms was implemented. During this time around 4 per cent of children in this cohort turned 13, this can increase both Family Tax Benefit and the child support payable as the higher costs of teenagers is recognised in both systems. Over 80 per cent of receiving and paying parents have newer income details available, for over 70 per cent this newer income was higher than the previously available income details. This increase in income means the increase in resources available for parents also increases the available resources for the child. Another change which influences the outcome of the analysis is where 1 in 4 receiving parents (25 per cent) changed their Family Tax Benefit estimate; this change may alter the amount of Family Tax Benefit payable to receiving parents.