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Thursday, 2 April 1998
Page: 2470

Mrs DE-ANNE KELLY (11:42 AM) —I would like to commence by giving my sincere thanks to the member for O'Connor (Mr Tuckey). It was a difficult time there for the Chair and Mr Tuckey stepped into the breach very well. I do not think that he spoke for too long at all and the points that he made were very well received and pertinent to the difficulties that we face with the Child Support Agency and the legislation.

I rise today to speak on the Child Support Legislation Amendment Bill 1998 and I would like to deal with some background on how this legislation came about. The foundations of the child support scheme are found in four separate statutes: the Child Support (Assessment) Act 1989, the Child Support (Registration and Collection) Act 1988, the Social Security Act 1991 and the Family Law Act 1975. So there are four statutes, and the fact that there is this level of complexity within the legislation certainly does contribute to some of the difficulties encountered.

Let me say at the outset that this is one of the most contentious matters that comes into my electorate office. And every member who has spoken here today, and previously, has highlighted the fact that this is one of the most difficult constituent problems that comes into an office.

I would like to thank the Child Support Agency in Townsville. We do not have a Child Support Agency in Mackay, but we certainly have one in Townsville and the officers there lend support to my electorate officers to a great extent. I do want to make it clear that criticisms of the inherent difficulties in the acts, and so on, do not apply to the staff of the Child Support Agency. Many of them work long hours under difficult conditions with what is a highly emotionally charged issue. I would also like to register the work that our electorate staff do. In my office the staff encounter many heart-rending situations. They offer assistance above and beyond the call of duty of an electorate officer, I think.

I would like to move on now to some of the changes that are contained in this bill. The reforms are based on the principle that children are the financial responsibility of their parents and that government should not seek to intrude unnecessarily into people's lives. Government involvement should, however, 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. We are all aware that non-custodial parents, by and large, want to maintain a relationship with their children. They want to assist in supporting those children. Goodwill can and should prevail.

This is a very difficult issue because we have brought into it, I believe, legislation that is unnecessarily harsh in many instances. In a situation where we should be working towards goodwill between both parents for the sake of children, the harsh regime in the legislation which does not take account of many facets of the custodial or non-custodial parents' lives adds rancour to the whole debate and to the situation that separated parents face.

I will go through some of the measures in the package proposed in this bill. There is a change to the calculation of the child support liability payments, recognising that some payers do not have sufficient means to support themselves and their second families. There is additional assistance to many thousands of children by introducing a minimum payment of child support and by including a wider range of income when assessing child support liability.

One of the difficulties that we face is that while some non-custodial parents are left in a very difficult financial situation after taxation and the payment of child support, there is another group of custodial parents who receive no child support payment whatever. They make up, I understand, about 40 per cent of custodial parents. So there are difficulties for both a particular group of non-custodial parents and a particular group of custodial parents.

The measures in this bill are directed to both custodial parents—I prefer the term `residential parents' used by Attorney-General (Mr Williams)—and also to non-custodial parents—and for that the Attorney-General has wisely brought in the term `non-residential parents'. Custodial implies an ownership of the children, which is certainly not the case. Nobody owns children, but everyone loves their children, and I think the terms residential and non-residential are far more applicable to the real feelings of the parents in these cases.

For the residential parent, and particularly that 40 per cent who receive no payment, the bill introduces a minimum payment of $260 a year. This translates to about $5 a week. I have to say that at the meetings where I have spoken this minimum payment has been well received. Unfortunately, there is a group who have opted either to become permanent students or to go on unemployment benefits to avoid their obligations. The recognition must be there that each parent has an obligation and a responsibility to their children. No matter how modest that financial support might be, the obligation is there and the community expects that both parents will make a contribution, no matter how modest. This $260 payment has been welcomed.

The other thing that we have done in the bill for residential parents is to broaden the income base. Net rental property losses and exempt foreign income will be added back to the parent's taxable income used to determine the child support liability. This, again, is a move that has been long overdue. Regrettably, there are some non-custodial parents who do avoid their responsibilities. It is far easier for those perhaps self-employed to be able to use, as I have seen, some imaginative schemes to lessen their taxable income and hence avoid child support payments. We all respect the parent who makes a contribution and we agree that there need to be changes to the formula. But it is wrong, and I am sure every right thinking person would agree, that somebody is able to totally escape responsibility for their children. So broadening the income base, I believe, is a sound measure.

For residential parents, there is another measure as well, addressing family violence and the issues concerned with that. The Child Support Agency will introduce case management to assist parents at risk of family violence to commence or continue child support collection wherever possible and will amend the legislation to allow for parents to end assessment or collection where family violence is proved.

I will move on now to non-residential parents. What we are doing with non-residential parents and their concerns is to increase the exempt income—the self-support component of payer income. This is the amount that is allowed to be deducted from the income to allow for living expenses. That is going to be increased by 10 per cent such that the self-support component for a single non-residential parent will increase from $9,006 to $9,907 a year. As well as that, there are other measures for non-residential parents: there is a lower payee's disregard and an allowance for child-care costs as well. The residential parent who is in the work force could previously earn up to $37,424, also taking into account child-care add-on costs, and not have that taken into account when the child support payment was calculated for the non-residential parent.

This, as we have seen from various cases mentioned today, has been most unjust. It can well be that the residential parent goes on to a career where there is an excellent income or, as the case may be, takes on part-time work, again, where there is an excellent income. The non-residential parent who may have a modest income is left in a very difficult financial situation. There is a difference in the quality of living for those two groups—the residential and non-residential parent.

It is very important that the financial situation of the residential parent be taken into account as it is in here. That disregarded income threshold is going to drop, as I said, from $37,424 to $29,598 with no fixed child-care add-ons but there is an ability for re-assessment where there are high child-care costs. This is a much fairer reflection, I think, of the circumstances of both the non-residential and residential parent.

There are a number of other changes which I will not go into at this point in time. What I will do is give an overview of the number of families that are going to be affected by these changes. For the residential parent, with the change to a minimum payment of $260 and broadening of the income base, it seems likely there will be 175,000 families who will receive more child support. There will also be 9,000 families who will receive less family payment. For the changes relating to non-residential parents—the increase in the exempt income and the lower disregarded income amount—we are looking at 300,000 non-residential parents paying less child support and 15,000 families getting more family payment. These substantial changes are going to be reflected in a great number of families across the nation.

I would like to speak about some of the cases that come before my office. We have all heard today of the tragic situations at both ends of the spectrum for residential and non-residential. I do not wish to dwell on it unduly because I know the same situation is coming to every electorate office but I feel I would be lacking in my duty to my constituents if I did not mention some of the more difficult cases that have come to our office and some cases where I believe the Child Support Agency has been overly zealous. One, in particular, concerns a father—a non-residential parent—who took a job after the Family Court removed most of his property, regrettably. He took a job with his mother and father on a farm. He had not worked on the farm for many years—he had been employed in another capacity—but, following an injury, he was unable to continue working in that capacity so he went back to farm work, which he had not been doing for many years.

As a result of the changed circumstances, his older brother had far more experience with farm machinery and was undertaking a far more responsible role on the farm with regard to machinery, but he himself was working largely as a labourer. Naturally enough, there was a difference in the amount the parents were financially able to pay both of them. It was quite a difficulty for them to take the second son in on the farm, but they did so because he needed somewhere to live.

However, the Child Support Agency did not accept that two brothers working on the farm could have different incomes, and they rang up to interview the older brother with the higher income. They interviewed his wife—and I consider this most inappropriate—and said that they would ascertain that both brothers were going to earn the same income. Whether the brothers did or did not in fact do so, the CSA were going to take it that both brothers earned the same income, regardless of the type of work they were doing on the farm; and this was in fact how they did assess the child support payments. I consider that most unjust. I also believe that it is inappropriate for the Child Support Agency to interview other parties in trying to determine what the level of income is.

I could mention another case, again dealing with a non-residential parent. We have a lot of seasonal work in our area and, during the sugarcane crush, wages are high. That means of course that for non-residential parents the child support payments are at an equally high level, reflecting that higher income. However, when the crush finishes, the seasonal work ceases, and many of the non-residential parents fall down to a very low income during the maintenance period in the mills.

I had a non-residential parent who literally could not live come into my office. He could not get his review through quickly enough to take account of his changed income and was destitute. He was living with a friend in a flat underneath the house. He was borrowing to pay bills and buy food and was in a very difficult situation. We were able, with the help of the Townsville office, to rush through another review of that case, but it certainly left him in a very difficult situation.

Moving on to the case of a residential parent, as I have said, 40 per cent of residential parents receive no payment. I do know of a case where a residential parent who was regrettably in very poor health received no payment at all, despite the fact that the non-residential parent was a well-to-do businessman with three successful businesses. The family was living in a condemned house. Because a re-assessment was made, the residential parent, the mother, had to repay some money to the Child Support Agency.

For that and a variety of other reasons that I will not go into but that were associated with her illness, she was in the situation at one stage where, again, there was no money for food for the children. She rang our office in desperation, and we were able to get her some assistance from one of the charities with regard to food. I visited her home, and there was no doubt that that little family was in a very difficult situation.

There are sad and tragic circumstances on both sides of this very vexing question. I would like to recommend to the House the changes we see before us in the bill. There is no doubt that they need to go further, and the government is looking at an additional group of measures to address some of these very sad situations that come into our offices, right across Australia.

I would welcome a third tranche of changes. I do believe that we need to address the question of the exempt income amount and see that raised. I certainly believe there needs to be more accountability for the way in which child support payments are spent, so as to ensure that in fact they are spent on the immediate needs of the children and their long-term welfare.

There are a number of amendments that have been foreshadowed as coming before the House and some of those are worthy of consideration. The proposed amendments of the honourable member for Dickson (Mr Tony Smith) contain a great number of good measures in them. I have looked at those that are proposed by the opposition. I think that the one involving the assessment of fringe benefits for a non-residential parent would impose a great burden on small businesses. They already find the burden of paperwork quite a task and that proposal would add a considerable burden to small business.

Certainly, some of the others have merit. I am aware that the backbench task force on child support will be looking very closely at the proposals put forward that have merit. One of those proposals is the one to have more accountability in the way in which additional measures such as the payment of school fees is taken into account in child support payments. Some of the amendments have merit and should be looked at further. Others, unfortunately, will just be too cumbersome to implement.

The bill is a significant step along the way towards achieving fairness and some reconciliation between parents caught in the difficulties of family breakdown. I certainly hope that it will assist in focusing attention on the most important aspect of family breakdown, the welfare of the children. I commend the bill to the House.