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Thursday, 14 May 1998
Page: 3374

Mr MILES (1:26 PM) —in reply—In summing up, I would like to thank the participants in this debate. For a long time all of us in this parliament have recognised that this is a very complex area for the parliament to come to grips with. It is something which involves a lot of emotion, and I think all of us are concerned to try to move the legislation forward.

In reply, I would like to stress a few things. The measures contained in this bill are good, sound changes. They will provide real benefits to parents by introducing flexibility into the child support scheme and will improve timeliness, accuracy and responsiveness in the administration.

I commend the government's continuing commitment to reform the child support scheme to underscore the fundamental principle that parents are primarily responsible for the financial support of their children and that government will not unnecessarily intrude into people's lives. The Australian Labor Party has not properly addressed the child support issues and has ignored the recommendations of the inquiry by the Joint Select Committee on Certain Family Law Issues into the operation and effectiveness of the child support scheme.

The measures in this bill were announced in a joint media release on 30 September 1997 by the Minister for Social Security, Senator Jocelyn Newman, and the Assistant Treasurer, Senator Rod Kemp. The bill improves the scheme's flexibility and provides greater equity for parents. It enables parents to take greater responsibility for support of their children. At the same time, the government will provide a safety net to ensure that children of separated parents are adequately supported and that the general community is not asked to carry an undue burden.

The changes in this bill are, firstly, changes to child support payable. They increase paying parents' exempt income by 10 per cent; include an amount for shared care of a child in the exempt income amount; reduce the amount of the payee's disregarded income amount and remove the automatic inclusion of child care in the payee's disregarded income; allow high child-care costs to be a ground for a departure from the assessment; reduce the effect of the payee's disregarded income; introduce a minimum payment of $260 per year and make child support payable for secondary students until the end of the school year in which they turn 18; include rental property losses and foreign exempt income to calculate child support; base child support assessments on the most up-to-date income of parents; use an uplift factor only where the parent has not lodged the most recent tax return; and no longer backdate child support liability.

Changes in the bill also include changes for second families, and these include the following points. They allow credit for child support paid in determining entitlements to family payments for payers' subsequent families. Changes to the administration are several, and I will quickly go through them. They will introduce a formal process to enable parents to object to the CSA's decision; no longer include the names and birth dates of relevant dependent children on the assessment notice; allow parents to agree to collect and pay child support privately at any time; and require parents to pay and collect child support privately where there is a good payment record.

There will be a better alignment of family court and child support legislation relating to the care of children. The changes will allow parents to end a child support assessment where their safety is at risk and provide support and assistance to parents to collect child support where safety is no longer of concern; improve notification and disbursement processes to reduce incidences of overpayments; allow child support debts to be offset between parents; allow the registrar to initiate the process to depart from the administrative assessment and to streamline the departure process; allow estimates of income to be rejected where they do not reflect the actual income; and allow liable parents to apply for a child support assessment.

As the member for Richmond (Mr Anthony) foreshadowed in his speech in the Main Committee, I will be moving an amendment to the bill and I am pleased to advise the House that this amendment was announced in the budget on Tuesday night. The amendment will allow payers to make non-agency payments without requiring the payees' agreement.

I would also like to make some comments about the role of the House of Representatives task force and their initiatives at this point. The task force of government members was formed to consider and report to the government on a number of matters related to child support. The government appreciates the work that the task force has done in such a short period and supports the following recommen dations that the task force made. I will just quickly go through those areas of recommendations for people's information, firstly in regard to persons evading child support by travelling overseas. The majority of people with child support liability pay the amount when it is due and pay the correct amount. However, there are some payers who have a child support debt and go overseas before the debt is cleared. The government will amend the child support legislation with effect from 1 January 1999 to give the Child Support Registrar the power to stop a parent who has persistently failed to meet his or her child support liability from leaving Australia through a departure prohibition order process.

The DPO will not be time limited and will remain in force until revoked by the Child Support Registrar when the debt has been paid or when satisfactory arrangements have been made. The process will come into effect from 1 January 1999. This is consistent with the taxation commissioner's powers which include a right of repeal to the Federal Court or Supreme Court. The remedy goes further than the joint JSC recommendation 115.

The second area is consideration of diverse forms of income received and taken into account for determining child support. Child support is calculated using a parent's taxable income. There are a number of ways in which parents can reduce their taxable income and consequently pay less child support. Many of these ways of reducing taxable income such as salary sacrifice are legitimate under the taxation laws. The government has recognised that parents are able to reduce their taxable income for taxation purposes but this is not appropriate for child support purposes.

The bill before parliament will add back to taxable income rental property losses and exempt employment income. Parents with second jobs and those that work overtime now have this extra income included in the income base for the calculation of child support. The government will establish an inter-departmental committee to examine the diverse manner in which all forms of income are received and taken into account for the purposes of child support assessments and will take account of the scope of tax reforms. The IDC would be chaired by DSS and comprise representatives from Attorney-General's, the Child Support Agency, Prime Minister and Cabinet, Finance and Administration, and Treasury. Other departments could be coopted as necessary.

In regard to transparency and independence of process to depart from the formula assessment I make the following comments: child support assessments are based on a formula. Parents who believe that the assessment is not appropriate can seek a departure from that assessment. Only about six per cent of parents seek a departure. The current process is perceived as not providing sufficient transparency or accountability. The registrar will review the process and will focus the concerns with a view to providing substantial improvements to current processes. The existing process to depart from formula assessment will be examined to develop a range of options which will improve its transparency and accountability to enable changes to be considered in the 1999-2000 budget process.

A review of the training qualifications and remuneration of officers contracted to determine applications to depart from formula assessment will report to the Assistant Treasurer by 30 June 1998. The examination of the departure process will include legislation, procedures, information needed by clients, physical location and accountability of officers, notification of decisions and appeal mechanisms including an evaluation of the proposed legislative amendment which introduces objection provisions for departure decisions. Reviews are preferred to jumping prematurely to a judicial or quasi-judicial process which will be costly to administer and will run the risk of returning to a system which was largely out of reach of most parents.

As to payer concerns about contact or access with children, currently the only recourse for parents denied contact with children is to lodge repetitive applications for enforcement with the court. These applications involve a delay varying between a few weeks and over six months and a range of penalties that are difficult to impose in the context of the best interests of the children. These processes are a significant cost to government and frequently to legal aid funding. The pilots will provide practical demonstration of alternative community based support for parents experiencing difficulties with contact. Pilots to help ensure compliance with Family Court child contact orders will be established within community based agencies, contracted under the family relationships services program.

Pilots will be contracted at four locations—Parramatta, Brisbane, Townsville and Hobart—and will be three-pronged: firstly, information education sessions when the order is made; secondly, immediate assistance for parents to resolve conflict over contact; thirdly, a compulsory diversionary program for parents in breach of a contact order.

The Attorney-General will also consider the establishment of a parliamentary committee to examine all aspects of family law contact and compliance once the Family Law Council has delivered its report in June 1998. Providing assistance to parents to resolve issues without court intervention is in line with recent changes in family law that encourage people to resolve family disputes outside the judicial system. A compulsory diversionary program provided by community based agencies for parents convicted of breaches would be a credible alternative to the current scope of penalties which range from recognisance to imprisonment.

I thank those people who have participated in this debate and, as I said, I foreshadow that we will be moving amendments in the detail stages.

Question resolved in the affirmative.

Bill read a second time.

Message from the Governor-General recommending appropriation announced.