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

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Presentation on theme: "Australian experiences of child support administration and reform Dr Kay Cook Vice Chancellor’s Senior Research Fellow."— Presentation transcript:

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 , 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 RMIT University©2014 Centre for Applied Social Research 2

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) RMIT University©2014 Centre for Applied Social Research 3

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 Centre for Applied Social Research 4

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) RMIT University©2014 Centre for Applied Social Research 5

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 RMIT University©2013 Centre for Applied Social Research 6

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 RMIT University©2014 Centre for Applied Social Research 7

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) RMIT University©2013 Centre for Applied Social Research 8

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 RMIT University©2013 Centre for Applied Social Research 9

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 RMIT University©2013 Centre for Applied Social Research 10

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 2003 Inquiry RecommendationsPolicy Trajectory Who stood to benefit? 1.Reducing the cap on payer parent’s assessable income (maximum liabilities) 2.Eliminating the link between contact and child support liabilities 3.Amending the calculation of child support on income from overtime and second jobs 4.Increasing prescribed ‘in-kind’ payments from 25% to 30% of the total liability Realised in the legislative changes Payers 5.Increase minimum liability from ₩ 249,000 to ₩ 498,000 per year Revised downwards Payees ( 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 RMIT University©2013 Centre for Applied Social Research 14

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 RMIT University©2013 Centre for Applied Social Research 15

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) RMIT University©2013 Centre for Applied Social Research 16

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) RMIT University©2013 Centre for Applied Social Research 17

18 References Cook K (2013). Child support compliance and tax return non-filing: A feminist analysis. Australian Review of Public Affairs 11(2): Cook K, McKenzie H & Knight T (2011). Child support research in Australia: A critical review. Journal of Family Studies 17: Cook K & Natalier K (2013). The gendered framing of Australia’s child support reforms. International Journal of Law, Policy and the Family 27: 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, 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. RMIT University©2014 Centre for Applied Social Research 18

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: Patrick R, Cook K & Taket A (2007). Multiple barriers to obtaining child support: Experiences of women leaving violent partners. Just Policy: Smyth B & Henman P (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: RMIT University©2013 Centre for Applied Social Research 19


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