Australian experiences of child support administration and reform

1. Australian experiences of child support administration and reform Dr Kay Cook Vice Chancellor’s Senior Research Fellow

2. Child support in Australia • Prior to 1988-89, child support was obtained through the Family Court of Australia • The Family Court still determines property settlements and child custody arrangements • Problems with the court-based system: • only applied to married parents until the late 1980s • was costly and time-consuming for parents to access • caused conflict between parents • demonstrated little consistency between the amount of child support awarded across cases • was poor at ensuring payment compliance Centre for Applied Social Research

3. The case for a Child Support Scheme • During the Australian economic recession of the 1980s • welfare costs were escalating due to increasing numbers of single parent families • research both within Australia and internationally revealed the poverty experienced by children growing up in single-mother-headed households • Reducing child poverty was a driving force behind the development of Australia’s Child Support Scheme alongside reducing welfare expenditure (Fehlberg & Maclean 2009) Centre for Applied Social Research

4. Australia’s Child Support Scheme • Child Support (Registration & Collection) Act 1988 • Established the Child Support Agency (CSA) now known as the Department of Human Services – Child Support (DHS-CS) for the collection and transfer of payments • Amended Social Security legislation to place emphasis on accessing private financial support from ex-partners • Child support does not directly reduce welfare benefits • Child Support (Assessment) Act 1989 • Introduced the child support formula to determine assessment amounts for parents who separated or had children born after June 1 1989 Centre for Applied Social Research

5. The bureaucratic context • The Child Support Agency was originally located within the Australian Tax Office (ATO) • Extended the ATO’s role from collecting tax from wages to collecting child support • The ATO was uncomfortable with its new role in distributing child support payments to recipients • This bureaucratic relationship only lasted until October 1988 (Edwards, Howard & Miller 2001) Centre for Applied Social Research

6. Shifting responsibilities • In October 1988, the CSA was transferred to the (now) Department of Social Services (DSS) • The DSS was (at the time) responsible for both welfare service delivery and the associated legislation • In 2004, the CSA was transferred – along with other service delivery agencies – to the DHS-CS • While the DHS-CS is responsible for child support service delivery, it has no authority over child support legislation • This is problematic for relaying service delivery issues back to policymakers Centre for Applied Social Research

7. How parents can arrange child support DHS-CS Collect • DHS-CS assessment of the amount to be paid • Money is paid to the DHS-CS and transferred to the recipient • Recipients must manage the DHS-CS re non-compliance DHS-CS Private Collect • DHS-CS assessment of the amount to be paid • Payments are transferred privately between parents • Recipients are responsible for managing non-compliance Self Administration • Payment amounts are negotiated and transferred privately between parents Centre for Applied Social Research

8. Payment experience • Low income women in receipt of government benefits are required to use either DHS-CS Collect or DHS-CS Private Collect or they face reduced Family Tax Benefits (FTB) • The amount of child support women expect to receive is used to calculate their FTB entitlements • Over 50% of parents transfer payments via DHS-CS Private Collect • DHS-CS Private Collect payments are assumed to be 100% compliant (actual rates are unknown) Centre for Applied Social Research

9. An unequal burden of responsibility • Women can report a child support underpayment and have their Family Tax Benefits increased • this not well understood by women and not well advertised by the DHS (Cook 2013) • Even when women do know this, they often do not report underpayments due to: • fear of violence or threats to take children away • wanting to keep the peace with their ex-partner, or • hoping to increase the likelihood of future payments • Women bear the responsibility for managing payments and arrears due to the impact on FTB Centre for Applied Social Research

10. Public acceptance of the Scheme • Child support is one of the most complained about social policies in Australia, particularly by payers • Paying parents claim: • they pay too much • money is used by the resident parent rather than on children • Recipient parents claim: • minimum payments are inadequate (approx. ₩6700 per week) • compliance is poor • seeking unpaid payments or reporting non-payment to the DHS-CS places them and their children in danger Centre for Applied Social Research

11. Australian child support reform 2003 Inquiry: Over 1600 submissions 21 public hearings 2005 Taskforce 2006 – 08 Legislative Reforms

12. Policy outcomes of the Inquiry and Taskforce (Cook & Natalier 2013)

13. Policy outcomes of the Inquiry and Taskforce

14. Public responses to the reforms • Women’s groups and researchers have noted an imbalance in the outcomes of the reforms that favoured the vocal men’s rights lobby • Payers as a group were better off • Low income mothers on average lost ₩19,000 per week • In contrast, men’s groups, researchers and politicians have suggested that the reforms addressed the gender imbalance that existed from the outset of the Scheme • But single mother and children’s poverty persists, and in some cases was worsened Centre for Applied Social Research

15. The importance of ‘public’ confidence • Child support rates are not excessive for payers • Child support does not replace welfare benefits • All child support money received by the DHS-CS is transferred to resident parents • Fathers often want assurance that payments are spent directly on children, as a visible sign of their support • But for mothers, child support does reduce the value of other, supplemental government payments • up to 45% of the value can be lost due to reduced FTB • Reducing government welfare expenditure and appeasing fathers appear to have been prioritised over reducing child poverty Centre for Applied Social Research

16. Recent developments • Australia has again embarked on a Parliamentary Inquiry into the Child Support Program • Aims to examine how to make the system ‘fairer’ • methods to collect arrears and manage overpayments • whether the child support system is flexible enough • the alignment of child support and Family Tax Benefits; • linkages between Family Court (child custody) decisions and DHS-CS policies and processes, and • how the Child Support Scheme could provide better outcomes for high conflict families (www.aph.gov.au/childsupport) Centre for Applied Social Research

17. Child support research in Australia • The DHS-CS do not release data for research purposes and only seldom partner with academics to recruit DHS-CS customers • Academic research has focused primarily on economic winners and losers, not why parents behave as they do and how the system could better meet their needs • Child support policy reform has occurred in a vacuum, which has contributed to the ongoing policy problems • Strong research collaborations and data sharing are required to inform effective and publicly palatable reforms (Cook, McKenzie & Knight 2011) Centre for Applied Social Research

18. References Cook K (2013). Child support compliance and tax return non-filing: A feminist analysis. Australian Review of Public Affairs11(2): 43-64. Cook K, McKenzie H & Knight T (2011). Child support research in Australia: A critical review. Journal of Family Studies 17: 110-125. Cook K & NatalierK (2013). The gendered framing of Australia’s child support reforms. International Journal of Law, Policy and the Family 27: 28-50. Edwards M, Howard C & Miller R (2001). Social Policy, Public Policy: From Problem to Practice. Crows Nest, NSW: Allen & Unwin. Fehlberg B & Maclean M.(2009). Child support policy in Australia and the United Kingdom: Changing priorities but a similar tough deal for children? International Journal of Law, Policy and the Family 23, 1-24. Natalier K, McKenzie H & Cook K (2013). Women’s experiences of child support: Accounting for the financial and social dimensions of money. Paper presented at the International Symposium on Child Support, Canberra: Crawford School of Public Policy. Centre for Applied Social Research

19. Other key sources Australian Law Reform Commission (2011). Family violence and Commonwealth law: Discussion paper. Canberra: Australian Government. Australian Law Reform Commission (2012). Family violence and Commonwealth laws - Improving legal frameworks, Final Report. Canberra: FaHCSIA. House of Representatives Standing Committee on Family and Community Affairs (2003). Every picture tells a story: Report on the inquiry into child custody arrangements in the event of family separation. Canberra: Commonwealth of Australia. Ministerial Taskforce on Child Support (2005). In the Best Interests of Children - Reforming the Child Support Scheme, Report of the Ministerial Taskforce on Child Support,. Canberra: Commonwealth of Australia. Natalier K & Hewitt B (2010). “It's not just about the money”: Non-resident fathers' perspectives on paying child support. Sociology 44: 489-505. Patrick R, Cook K & TaketA (2007). Multiple barriers to obtaining child support: Experiences of women leaving violent partners. Just Policy: 30-37. Smyth B & HenmanP (2010). The distributional and financial impacts of the new Australian Child Support Scheme: A 'before and day-after reform' comparison of assessed liability. Journal of Family Studies 16: 5-32. Centre for Applied Social Research