1.3 Child Support Scheme Reforms 2006–08
From 1 July 2006 the Government is progressively changing the Child Support Scheme.
In changing the Scheme, the Government has accepted the recommendations in the Report of the Ministerial Taskforce on Child Support, 3 chaired by Professor Parkinson (released in May 2005). This review was initiated in a response to a recommendation of the House of Representatives Standing Committee on Family and Community Affairs Report on child custody. This report was titled, Every Picture Tells a Story: Inquiry in child custody arrangement in the event of family separation, 4 and was released in December 2003.
3. Ministerial Task force on Child Support, In the Best Interests
of Children – Reforming the Child Support Scheme, Commonwealth of Australia,
Canberra, May 2005.
4. House of Representatives Standing Committee on Family and Community Affairs,
Every Picture Tells a Story, Parliament of the Commonwealth of Australia,
Canberra, December 2003.
These changes will be introduced in three stages over a two year period:
Stage 1—from 1 July 2006
- Increase the minimum payment from $260 to $320 to ensure that child support payments keep pace with inflation.
- Strengthen the Child Support Agency’s capacity to ensure payers pay their child support payments in full and on time.
- Recognise payers on Newstart and related payments who have contact with their children by paying them a higher rate of Centrelink payment.
- Reduce the maximum amount of child support payable by high income earners to ensure these payers are more aligned with the costs of children. The maximum payer child support income was reduced from $139,347 to $104,702.
- Introduce fairer arrangements for assessing the capacity of parents to earn income.
- Enable payers to spend a greater proportion of their payments directly on their children by increasing the percentage of Non Agency Payments (NAPs) from 25 percent to 30 percent.
Stage 2—from 1 January 2007
- Introduce independent reviews of all Child Support Agency decisions by the Social Security Appeals Tribunal to improve accountability and transparency.
- Broaden the powers of the courts to ensure that child support obligations are met, and strengthen the relationship between the courts and the Child Support Scheme, making the process easier and more responsive to parents’ needs.
- Allow separating parents more time to work out parenting arrangements before their Family Tax Benefit is affected.
Stage 3—from 1 July 2008
- Introduce a new child support formula to ensure fairer assessments, encourage shared parenting and recognise the costs of contact.
- Ensure a minimum payment is made to each eligible family.
- Treat more fairly payer incomes from second jobs and overtime that assists with re-establishment costs after separation.
- Ensure fairer treatment of payers with dependent step-children when calculating their child support liability.
- Simplify the ‘Change of Assessment’ rules for altering the amount of child support that is payable.
- Improve the arrangements for parents who wish to make agreements for ongoing child support or lump sum payments.
- Make the child support rules easier for reconciling parents.
The changes build on the Government’s reform of the family law system to encourage shared parenting and reduce conflict. This will complement the commitment of nearly $400 million over four years to establish a network of Family Relationship Centres (FRCs) and related services in the community. The first centres opened on 1 July 2006 and CSA began to refer customers to the FRCs from that date.