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2001 legislative reforms
The Child Support legislation Amendment Bill (2000) was passed through Parliament on June 29 2001. The Parliament supported all but three of the measures in the Bill. The three that were not supported have not become law. The Bill was given Royal Assent by the Governor-General on June 30 2001.
The new measures are:
Income earned for the benefit of resident children
A new 'reason' for a change of assessment is being introduced for parents with new families who have income derived from a second job, regular overtime or other additional income source. The new reason will apply where:
- a parent can demonstrate that the additional income is earned for the benefit of the children (both natural/adoptive and step-children) in their current (subsequent) family;
- the additional income is not earned as part of the normal earning pattern established by the parent prior to establishing a subsequent family, for example through regular or seasonal overtime or seasonal employment; and
- the additional income does not arise from a condition of an existing income source, for example, mandatory overtime, shift work conditions or normal incremental increases in pay (including normal career advancements).
The overall amount of additional income to be excluded from the assessment will be limited to a maximum of 30% of the parent's total child support income. This maximum amount will ensure an even distribution of child support income between the parent's first family and subsequent family.
Commencement date: 30 June 2001
Waiver of Family Tax Benefit (FTB) eligibility
The first new amendment allows a non-resident parent who is receiving, or is entitled to receive, part of an FTB entitlement on the basis of having more than 10% care for the child, to waive his or her eligibility for FTB. This will allow the resident parent to receive the full amount of FTB for the child for the period.
Commencement date: 1 December 2001
Using Family Tax Benefit (FTB) to pay a child support debt
The second new amendment will enable the Child Support Agency (CSA) to garnishee FTB paid to a parent if that parent has outstanding child support for the child. Where child support has not been paid, and a suitable arrangement cannot be made with the paying parent, CSA will request Centrelink to withhold FTB payable to that parent and remit it to the CSA. CSA will credit the amount to the paying parents child support account and pay it to the resident parent in whole or partial payment of their child support entitlement.
Commencement date: 1 July 2002.
Increase in deductible child maintenance expenditure for family tax benefit and child care benefit
Paying parents with second families will now be able to claim 100% of any child support paid as a deduction from the household income used for determining the family's entitlement to the Family Tax Benefit and Childcare Benefits.
Commencement date: 1 July 2001
Departure prohibition orders
The Registrar will be able to issue a departure prohibition order (DPO) to prevent a payer leaving the country where that paying parent has persistently failed to meet his or her child support obligations. Once a DPO has been issued, the Registrar will then be able to issue a certificate authorising a particular departure. The paying parent will have the right to challenge a DPO in court. It is expected that this provision will be used sparingly.
Commencement date: 30 June 2001
Minimum rate of child support
A paying parent paying the minimum rate of child support is able to have certain types of incomes excluded when applying for a reduction to nil. The types of income excluded are prescribed in the Child Support legislation Regulations. They are:
- payment of amenity allowance or gratuity to prisoners
- disability support pension
- pension paid to a veteran who is totally or permanently incapacitated
Commencement date: 2 August 2001
Definition of eligible carer
This change relates to situations where the child is living with someone other than their parents.
The carer in this situation will be an eligible carer unless:
- the parents have not consented to the child living with that person, and
- it would not be unreasonable for the child to live with the parents.
It will be unreasonable for the child to live with the parents where there has been extreme family breakdown or the child's safety would be at risk.
This change is to deal with situations where the child has (effectively) run away from their parents to live with some third party against the parents' wishes and the third party carer applies for child support from the parents.
Commencement date: 30 June 2001
Administrative arrangements
The principal change relates to the position of Child Support Registrar-the Commissioner of Taxation will no longer be the Child Support Registrar. Instead, the Registrar will be the General Manager of the Child Support Agency. There will no longer be a Deputy Child Support Registrar.
Secrecy provisions have been rewritten to ensure there is no change to existing arrangements. They allow for the continued exchange of information between the ATO and the CSA for the purposes of the tax and Child Support legislation. Tax refund intercept provisions essentially remain unchanged.
These changes reflect the move of CSA from the Australian Taxation Office to the Department of Families, Housing, Community Services and Indigenous Affairs. The changes have minimal operational impact and are intended to ensure a seamless transition to the new arrangements.
Commencement date: 30 June 2001
Technical amendments
These amendments correct drafting errors and unintended consequences of prior amendments. Some are simply to correct references such as child support years. The most significant changes are:
- objection rights for prescribed NAPs;
- a person can appeal to a court or apply for departure order as long as one person in the case has objected first to the CSA decision (currently, the only person who can go to court is the person who objected); and
- changes to penalty calculations where the paying parent has elected to have a payment period (flexible due dates).
- confirming departure determinations to below $260 annually where children are shared or divided between parents.
- correcting the annualising calculation required in a departure application when determining that costs of contact are high
- ensuring that a child in relation to whom an assessment has been extended beyond age 18 is treated as 17 for all purposes whilst the extension applies.
Commencement date: 30 June 2001
The measures that did not get passed:
- Lower child support percentage for children with whom liable parent has 10% to 30% contact
- Lower cap on child support formula assessment income
- Removal of the existing requirement that any accompanying documents to a change of assessment application or response be served on the other part
