Note: Where available, the PDF/Word icon below is provided to view the complete and fully formatted document
Child maintenance reform



Download PDFDownload PDF

The Parliament Qf 'the Commonwealth' of Australia

• 1&_c04 •

Child Maintenance Reform

Current Issues Brief Number 4 1986-87

Legislative Research Service Department of the Parliamentary, Library

The Parliament of the Commonwealth of Australia

CHILD MAINTENANCE REFORM

Dale Daniels Education and Welfare Group Legislative Research Service

Legislative Research Service Current Issues Brief Number 4 1986-87

ISSN 0726-3244

C

Commonwealth of Australia 1986

Except to the extent of the uses permitted under the Copyright Act 1968, no part of this publication may be reproduced or transmitted in any form or by any means, including information storage and retrieval system, without the prior written consent of the Department of the Parliamentary Library. Reproduction is permitted by Members of the Parliament of the Commonwealth in the course of their official duties.

Published by the Department of the Parliamentary Library, October 1986.

Contents

Introduction 1

Child Maintenance Law: Background 1

1. Participation Rate 2

2. Level of Payments 4

3. Compliance Rate 5

Custodial Parent Poverty 6

Moves Towards Maintenance Reform 7

Maintenance Reform Issues 10

1. Assessment Issues 13

2. Collection and Enforcement Issues 15

3. Coverage Issues 17

4• Contextual Issues 17

Conclusion 19

- 1

Child Maintenance Reform

INTRODUCTION

Considerable change has occurred in the pattern of Australian family composition since the mid 1970s. The most striking development has been the increase in the proportion of sole parent families in the community. By 1982, 14 per cent of families with dependent children were in this category, compared with 9 per cent in 1974. The same period saw an

increase in poverty and dependency among this group. By 1984 the proportion of female-headed sole parent families dependent on government income support had grown to 87 per cent from a 1974 figure of 65 per cent. Dependency among male-headed sole parent families had risen over the same period from 10 per cent to 34 per cent. This deterioration in the economic position of sole parent families is partly due to trends in the labour

market, but the failure of Australia's child maintenance arrangements has also been a contributory factor. With approximately 441 000 children[1] in sole parent families dependent on government assistance in 1985, the need for reform of child maintenance procedures is widely recognised. This paper will briefly trace the background to the present situation and attempt to highlight some of the numerous issues involved in the reform process.

CHILD MAINTENANCE LAW: BACKGROUND

Australian maintenance laws originated as a legislative response to a growing problem in the mid nineteenth century. A common law obligation existed upon fathers and husbands to provide for their dependants. Enforcement was an early problem in socially fluid and geographically large communities like the Australian colonies. In order to prevent deserted wives and children from becoming a charge on the public purse the colonies enacted Maintenance Acts. These Acts allowed courts of summary jurisdiction to make orders for the maintenance of dependants against the responsible man. Where marriages were dissolved, the divorce courts could make similar orders. These Acts remained the basis of maintenance law until 1976 when the Family Law Act came into force. The only major change before

1. Statistics from Cass, B., The Case for Review of Aspects of the Australian Social Security System, Department of Social Security, Social Security Review

Background/Discussion Paper No. 1, June 1986, p.5.

- 2

Child Maintenance Reform

then was the introduction of the Matrimonial Causes Act by the Commonwealth in 1961, giving it jurisdiction in the area of divorce. Maintenance of ex-nuptial children remained under State law for constitutional reasons.

The assessment of maintenance claims and the enforcement of orders were, from the beginning, inadequate and remained so. The Report of the National Maintenance Inquiry (1984)

summarised the situation by saying By the time the Family Law Act commenced operation in 1976, the Maintenance Acts and maintenance under the Matrimonial Causes Act appeared to satisfy no-one: wives were not noticeably obtaining payments under their orders and husbands were alarmed by their perception that assessment and enforcement systems were heavily biased against them. The original hopes and intentions of those who had instigated the Maintenance Acts had faltered in a welter of default and controversy. (2]

Maintenance became a responsibility of the Family Court in 1976 along with other matters related to marriage breakdown. Under the new legislation, maintenance continued to be assessed and enforced by recourse to the courts. The legal obligation upon parents to maintain their children was set out in section

73 of the Family . Law Act and a list of factors to be considered by the judge in assessing maintenance was included in sub-section 75(2) and section 76. The existing split in jurisdiction along nuptial/ex-nuptial birth lines was

continued, maintenance of children born out of a marriage remaining the jurisdiction of the State courts. The Commonwealth has constitutional power to legislate only with regard to children of marriages. The enforcement of maintenance orders continues to be regulated by court orders. In only two States (South Australia and Western Australia) have any mechanisms been established which deal primarily with maintenance enforcement. A lengthy description of existing enforcement procedures is contained in the National Maintenance

Inquiry Report. The present system is widely considered to be inadequate. Problems in the following areas have become evident over the last ten years.

1. Participation Rate

It was estimated by the National Maintenance Inquiry[3] that only 31.5 per cent of those custodial parents eligible for maintenance receive any. A number of factors appear to contribute to this situation:

2. Attorney-General's Department, A Maintenance Agency for Australia: The Report of the National Maintenance Inquiry, AGPS, Canberra, 1984, p.3. 3. Ibid., p.22.

- 3

Child Maintenance Reform

(a) The use of the Courts to determine and enforce maintenance involves legal costs and considerable amounts of time and effort. Those who need to pursue maintenance matters to any length are often the least

likely to be able to bear the cost, especially when legal aid is not always available. Female custodial parents constitute about 90 per cent of the total number of custodial parents[4] and they are generally less equipped than men, financially and educationally, to pursue maintenance through the courts.

(b) Many custodial parents have no desire to continue their dependence on their ex-spouses. They prefer to sacrifice the financial advantages of maintenance in order to increase their control of their own lives. (c) Child maintenance and alimony have never been

adequately separated and many non-custodial parents regard maintenance as an unjust imposition which involves them in subsidising their ex-spouses.

(d) Government income support systems (Supporting Parents Benefit §SPBt, Widow's Pension and Unemployment Benefits) contain stringent income tests and high marginal tax rates apply to those earning private income in addition to such payments. This provides an incentive for private maintenance arrangements to be arrived at which rely entirely on trust for their effectiveness.

(e) A history of harassment, violence or child access difficulties encourages many custodial parents to sever all ties with their ex-spouses.

(f) Maintenance payments have generally been set at low levels, averaging about $20 per week per child. The average payment has been, from the beginning, within the allowable additional income for those on

government pensions. The difficulties involved in gaining maintenance are often considered too great for the meagre reward.

(g) The Social Security Act provides that applicants for SPB or Widow's Pension must attempt to obtain maintenance before they may receive the pension. However, this provision cannot be rigorously enforced due to the hardships and delays which would result.

4. Ibid., p.19.

- 4

Child Maintenance Reform

2. Level of Payments

Maintenance payments have generally been well below any measure of adequacy. Institute of Family Studies research suggests that maintenance is well below the capacity to pay of many non-custodial parents.[51 Under the present system of judicial discretion in assessment of maintenance, a number of trends

appear to have contributed to the low level of payments:

(a) Social Security pension income tests encourage the • ordering of payments that fall within the $30 per week

(plus $6 for each child) area which does not affect pension entitlement. One of the factors the judge is able to consider under the Family Law Act is the availability of a government pension for the custodial parent. Maintenance, in practice, has come to be set at a level to supplement this pension.

(b) When assessing the capacity to pay of the non-custodial parent, the judge is able to take into consideration a large number of factors which effectively lower the priority afforded to child maintenance, especially where a second family has been established.

(c) Private arrangements made by the separating parents, which may place more importance on agreement and convenience than adequacy, are often endorsed by the judge. Little assistance is available to the negotiating couple and the many pitfalls they may encounter are often unknown to them.

(d) Inflation erodes the real value of payments. The only way to increase levels is by recourse to the courts again. No system of indexation is in place.

(e) In the absence of an adequate enforcement mechanism judges are tempted to award low levels of maintenance in the hope that this will encourage payment.

(f) Property settlements are used at times as a partial or total substitute for ongoing maintenance. However, even where, for example, the whole marital home is awarded to the custodial parent, its value in no way meets the expenses involved in maintaining the

5. McDonald, P., The Economic Consequences of Marriage Breakdown in Australia: A Summary, Institute of Family Studies, Melbourne,1985.

- 5

Child Maintenance Reform

children of the marriage until they are eighteen. Generally, property settlements are not so generous but they are still viewed in some cases as an adequate substitute for maintenance.

3. Compliance Rate

The National Maintenance Inquiry received a submission estimating that the compliance rate for maintenance orders was about 40 per cent, with a further 20 per cent being paid occasionally. [6] (This claim related to a number of metropolitan and country areas in Victoria.) The following contributing factors are widely cited:

(a) The near total absence of effective enforcement procedures, except in South Australia and West Australia where enforcement rates are marginally better. There appears to be little that can be done to prevent a non-custodial parent ignoring maintenance obligations or court orders.

(b) There is no government-run collection mechanism in most States. Consequently regular payment is subject to the goodwill of the individual non-custodial parent.

(c) Non-custodial parents who wish to evade payment can often successfully do so by withholding information about their location. The existing enforcement

mechanisms often fail at this point. In many casesinvolving custodial parents who have never married, paternity may be in doubt or legally not established. This allows the non-custodial parent to avoid the maintenance obligation.

(d) Maintenance often becomes involved in wider disputes. Resentment over the marriage breakdown or access conditions can cause poor relationships between the parents, resulting in maintenance default, harassment and even violence and child stealing. Maintenance becomes just another weapon in this situation.

(e) Societal attitudes to maintenance reflect a change in the traditional breadwinner ethic. Responsibility for supporting children is often pushed onto the custodial parent with government support. This evasion of

6. Attorney-General's Department, op.cit., p.11.

- 6 -

Child Maintenance Reform

parental financial responsibilities by non-custodial parents has gained some degree of social acceptance.

(f) New commitments on the part of the non-custodial parent, the remarriage or, more rarely, the financial success of the custodial parent are given as reasons for abandoning the maintenance obligation.

CUSTODIAL PARENT POVERTY

The failure quarters as among women families.

of the maintenance system has been cited in many a contributing factor to the increase in poverty and children in female-headed single parent

The Institute of Family Studies survey Economic

Consequences of Marital Breakdown conducted in 1984 provides some useful data on the link between maintenance and custodial parent poverty.[7] The group studied were Victorian men and women divorced in 1981 or 1983 who had children. Various other restrictions were made on the sample group and details are given in the original document. The sample is considered to have under-represented lower socio-economic groups. Income immediately before separation and at the time •of the interview, four to six years after separation, was measured.

Table 1 reproduced indication of the income affecting those changes.

from the survey .report gives an changes experienced and the factors

Maintenance payments averaged 13 per cent of the personal income of male payers and 25 per cent of the income of female recipients with the median amount per child being $20 per week. However, the most important finding, as shown in Table 1, is the comparative financial position of men alone versus women alone with children. The former were $72 per week better off with no dependants while the latter were $78 per week worse off with dependants. The clear implication is that women and children suffer considerable hardship and poverty when reliant on only the mother's earnings or government support, while the non-custodial fathers have increased incomes and largely escape

the child support obligation. A shift of income from non-custodial to custodial parents appears to be perfectly

7. McDonald, P., op.cit.

- 7

Child Maintenance Reform

the part of non-custodial children) to pay. The have remarried and have raises other questions

feasible given this clear capacity on parents (alone or married with no situation of non-custodial parents who new children is different again and which will be considered later.

MOVES TOWARDS MAINTENANCE REFORM

Awareness of the inadequacy of the present system has resulted in considerable pressure for reform. Moves towards reform began under the Fraser Government and have continued under the Hawke Government.

On 21 January 1983 the then Attorney-General, Senator Durack, and the then Minister for Social Security, Senator Chaney, announced their intention to amend the Family Law Act to remove the availability of government income support from the list of factors which a judge could consider in setting the level of maintenance. This decision followed the observations of the Joint Select Committee of the Parliament which had inquired into the operation of the Family Law Act. The Minister also foreshadowed a study of more efficient maintenance enforcement procedures.[8]

Soon after the change of government in 1983 the new Attorney-General, Senator Gareth Evans, issued terms of reference for a National Maintenance Inquiry to be conducted by officers of the Family Law Branch of the Attorney-General's Department. The Inquiry was to investigate a number of maintenance systems and to make recommendations 'on the establishment of a national agency to improve significantly maintenance enforcement and collection within Australia'.[9]

The Report of the Inquiry released on 7 February 1984 provided much evidence concerning the inadequacies of the existing system and recommended the establishment of a national maintenance agency modelled broadly on the existing South Australian system, 'to assist applicants to obtain orders or negotiate agreements, to receive and disburse maintenance moneys..., to assist to enforce orders and agreements upon default and to assist both applicants and respondents to seek variation orders and with financial counselling'.[10]

8. Attorney-General, Press Release, 21 January 1983. 9. Attorney-General's Department, op.cit., p.vii. 10. Attorney-General, Press Release, 7 February 1984, p.2.

- 8 -

Child Maintenance Reform

Table I

COMPARISON OF HOUSEHOLD INCOMES (a) FOR THE PRE-SEPARATION PERIOD AND THE TIME OF INTERVIEW, BY FAMILY TYPE AT INTERVIEW AND SEX OF RESPONDENT

Sex of respondent Men Women

Couple, Couple Couple, Couple

no with Sole no with Sole

Family type Alone children children parent Alone children children pare

Indicator:

Median excess/deficit over pre-separation income level in dollars per week +$72 +$149 -$4 +$60 -$84 +$8 -$4 -$7

Percent better off in 1984 75 74 49 69 29 (b) 49 2

Percent worse off in 1984 25 26 51 31 71 (b) 51 7

?ercent below poverty line 6 2 12 11 41 (b) 8 3

'ercent 0-20% above poverty line 7 3 12 6 15 (b) 16 1

)e rcentage in various amily types in 1984 33 20 31 12 8 5 28 5

+ 4 percent 'with others' +2 percent 'with others'

Fotes: (a) Both pre-separation and 1984 incomes are adjusted using equivalence scales fr( the Commission of Inquiry into Poverty (1975). Pre-separation income is adjusted to 1984 values. (b) Not reliable due to small numbers.

ource: McDonald, P., Table 2, p.12.

- 9

Child Maintenance Reform

A number of concerned organisations were, however, critical of the report. (111 Its terms of reference were criticised for being too narrow, dealing as they did with the collection/enforcement area to the exclusion of other issues. Little attention was given to the adequacy of the maintenance assessment system or to the problem of the interrelationship between government income support and family law maintenance provisions. The Inquiry was also accused of placing too much emphasis on cutting government expenditure on child support and not enough emphasis in improving the situation of children who suffered from the absence of one natural parent.

On 5 December 1985 Senator Durack introduced a Private Member's Bill to amend the Family Law Act along the lines he had foreshadowed in early 1983 when in Government. During debate on this Bill in February 1986, Senator Tate opposed the Bill and in doing so mentioned the need for a more comprehensive approach to reform of the maintenance system.[12]

Also in December, the Government set up a committee of Cabinet Ministers with the task of devising a more efficient maintenance system. The Committee was supported by a Maintenance Secretariat within the Department of Social

Security and Dr Meredith Edwards was appointed as a ministerial consultant on maintenance on 30 January 1986.[13]

On 21 January 1986 a Morgan Gallup Poll conducted on 29 November 1985 found that 76 per cent of those polled believed that parents who defaulted in the payment of maintenance should be forced to pay. In addition, 64 per cent agreed that the Government should collect child maintenance.[14]

The Cabinet committee has so far not reported, but the Minister for Social Security, Mr Howe, has announced that 'the Government will comprehensively reform existing arrangements for assessing and collecting child maintenance'.[151

11. See, for example, Wheeler M., of the Brotherhood of St Lawrence, A Critique of "A Maintenance Agency for Australia", 13 April 1984, and Lone Parent Working Party of the Victorian Social Security Consultative Committee,

Submission to the Attorney-General, Senator Evans, on the Report of the National Maintenance Inquiry. 12. Senator Peter Durack, Press Release, 5 December 1985, and Senate Hansard, 13 February 1986, p.300. 13. Minister for Social Security, Press Release, 30 January

1986.

14. Morgan Gallup Poll, Finding No. 1384, published in Bulletin, 21 January 1986. 15. Minister for Social Security, Press Release, 19 August 1986.

- 10 -

Child Maintenance Reform

The new system would have the following features:

(a) Judicial discretion in assessing maintenance would be replaced by a legislative formula administered by a child support agency under the control of the Commissioner of Taxation.

(b) The formula would take into account income of non-custodial parents, the number of children living with the custodial parents, and children living with the non-custodial parent. The non-custodial parent's contribution would thus be adjusted according to capacity to pay.

(c) Collection of maintenance would be by using the income taxation system to withhold payments at source.

(d) The scheme would cover those who do not already have effective maintenance and property arrangements.

(e) The Department of Social Security would be responsible for distributing maintenance payments.

The scheme is to be introduced in the 1987/88 financial year.

MAINTENANCE REFORM ISSUES

The objectives and basic principles of maintenance reform require consideration.

One statement of basic principles has been made by the Lone Parent Working Party (LPWP) of the Victorian Social Security Consultative Committee in its response to the National Maintenance Inquiry Report.

The principles on which the LPWP believes an effective income support system for lone parents should be based are:

a) children are a community resource and are entitled to community support, both financial and otherwise, to ensure their optimal development;

b) children have a right to expect support of all kinds from both parents;

c) government's pre-eminent responsibility should be to assist parents to provide adequate support for their children, thereby minimising the need for substitute

- 11 -

Child Maintenance Reform

care for children, which is undertaken at financial cost to the community and at social cost to the child and community;

d) no parent (custodial or non-custodial) should be locked into poverty because of their parental responsibilities;

e) no child should be locked into the income level of their parents for their life opportunities.(16]

One of the most comprehensive statements of objectives and basic principles to appear so far is contained in a paper by Meredith Edwards (then of the Social Justice Project at the Australian National University), Patricia Harper (of the

Institute of Family Studies) and Margaret Harrison (also of the Institute of Family Studies) presented to the Third Australian Law and Society Conference in December 1985.

Their statement of objectives and principles read as follows:

In proceeding towards any reform of the child support

system, it is important to identify the objectives underlying such reform. Two major objectives form the basis for the discussion which follows:

A. adequacy - to provide an adequate level of support for children who do not live with both parents to ensure the optimal development of the children;

B. equity - to ensure equity as between parents in contributing to the financial support of their

children.

There are, in addition, three broad principles which guide the discussion that follows; principles which stress the interrelationships of the rights of children and the obligations of parents and the State.

First, children have the right to financial as well as other support from both their natural parents and, following separation of parents, have the right, as far as it is possible, to have their previous standard of living maintained. Whenever financial support from

16. Lone Parents Working Party, op.cit.

- 12 -

Child Maintenance Reform

parents is insufficient to ensure their optimal development, children have the right to State support;

Second, parents have a continuing obligation to provide financial support for their children according to their capacity to pay irrespective, of whether they are living with their children and irrespective of whether new relationships have been entered into and new responsibilities undertaken; and

Third, the State has the responsibility to ensure an adequate level of financial support for children and to provide that support in such a way that parents are not discouraged from earning additional income, that the welfare of the children is improved and dependence on the taxpayer is reduced.[17]

Statements of principle such as these give clear positions on such questions as the balance between State and private responsibility for child support, and the balance between the obligations of custodial and non-custodial parents towards their children. They give the State final responsibility for providing adequate child support once parental resources have been equitably and fully tapped. This raises the practical issue of political motivation in the maintenance reform process. Government and Parliament must decide whether the primary objective of reform is government expenditure reduction or the provision of adequate and equitable child support arrangements. Many welfare groups would support Bishop Hollingsworth of the Brotherhood of St Lawrence who said, when commenting on this issue:

Once again, I say that the real challenge is to collect maintenance in order to make significant net improvements to the living standards of single parents and their children. It would be a Pyrrhic victory to reform the maintenance collection system purely to offset existing government expenditure while at the same time leaving the acute poverty problem untouched.[18]

Many of the issues to be considered below demand judgements upon this central issue before reform commences.

17. Edwards, et.al ., Child Support: Obligations of Parents, State Responsibility and the Rights of Children, paper presented to the Third Australian Law and Society Conference, December 1985, p.12. 18. Hollingsworth, Bishop P., 'Declaring War on Family

Poverty' in Australian Child and Family Welfare, Summer 85/86, p.18.

- 13 -

Child Maintenance Reform

The issues can be divided into four groups: assessment issues, collection and enforcement issues, coverage issues and contextual issues.[19]

1. Assessment Issues

The problems with the present maintenance determination system have been briefly dealt with above. These problems have led to the questioning of the relevance of a judicial role in maintenance assessment. Judicial assessment has been criticised as too variable, unpredictable and inequitable in its results.

Alternatives suggested are the limiting of the judge's discretion by the imposition of some clear cut formula for assessment or the removal to an administrative environment of assessment, again using a clear cut formula. The latter is proposed in the Government's Budget announcement on maintenance reform.

(i) Formula for judicial guidance: The judicial role in assessment can be defended as providing an individual approach to assessment and as necessary to keep maintenance assessment within the Family Court system. However, the assessment record of the existing Family Court-based system suggests the need for clearer guidance for judges who do not have the time or the necessary information to allow them to give full consideration to each case. Existing arrangements were developed when the volume of work was much smaller. It has been suggested that a clear cut formula, based on the capacity to pay of the non-custodial parent and the needs of the children, could provide consistent and adequate determinations. It would also provide clear guidance when agreements are being between spouses under the auspices of the Family lack of guidance and assistance to those negotiating is a recurring criticism of the present arrangements.

(ii) Formula applied by an administrative body: The removal of assessment from the Family Court to an administrative agency which would administer a clear cut legislative formula and operate a review system to cope with anomalies has been suggested in the latest Government proposals on maintenance

reform. Suggested advantages with these arrangements are:

(a) Assessment would be more equitable and predictable when judicial discretion is removed and replaced with a clear set of administrative guidelines;

(b) Assessment would be done by an agency able to cope with the volume of cases involved, thus reducing :delays and increasing the effectiveness of the system;

negotiated Court. The agreements

19. The following discussion draws heavily on Edwards et.al ., on,rit.

- 14 -

Child Maintenance Reform

(c) The expense and complication of legal proceedings would be avoided;

(d) Access to information on incomes and commitments of non-custodial parents would allow assessment in line with capacity to pay. Variation in this capacity and changes in the value of amounts assessed could be monitored and adjustments made.

(e) Maintenance assessment would not be dependent on the quality of the relationship between the parents or trade-offs involved in the negotiation process. The financial security of the children would not be lost among other issues in the marriage settlement. Poor relations between parents need not prevent maintenance being set expeditiously.

(f) A greater coverage of the eligible population would be achieved by a simpler and non-legalistic arrangement.

(iii) Factors in devising a formula: The broad thrust of a formula may well be simple and straightforward but many factors need to be considered in setting out the detailed provisions.

(a) Capacity to pay of the non-custodial parent: A

realistic assessment of the capacity of non-custodial parents to contribute to child support is necessary in order to ensure that their child support obligation is being fulfilled to the optimum level. At the same time it should provide safeguards to prevent them from being impoverished themselves or other children dependent on them being forced into poverty. An assessment of capacity to pay needs to consider these factors:

- Basic living expenses of the non-custodial parent

- Responsibilities of the non-custodial parent for dependants living with him/her, For example, s/he may have re-partnered and had more children or s/he may be supporting the children of the' new partner. A question of priority of responsibility can be seen in this context. Should the first family suffer because of the new family's demands on the non-custodial parent's resources? Should the State

- 15 -

Child Maintenance Reform

be required to support the first family so that the non-custodial parent can begin another?

- Should a new dependent spouse be considered when assessing capacity to pay? This could be seen as a State subsidy if it increases the government child support payments needed by the first family.

- Is taxable income or gross income a better measure of capacity to pay? If taxable income is used, will PAYE taxpayers who are non-custodial parents be at a disadvantage compared to other taxpayers who can utilise more taxation concessions to modify their incomes.

(b) The cost of supporting children: Arriving at an adequate maintenance payment requires some measure of the financial outlays involved in providing for children. This is a more complex calculation than is at first apparent. A decision must be made on whether a basic subsistence level of support is being considered or an approximation of pre-separation living standards or the level of support needed to allow full development of the child's potential. The family's financial situation has repercussions for children in the areas of education, health, career prospects and emotional health as well as basics such as food and shelter. Costs vary with the age of children as well. How should these variables be catered for?

2. Collection and Enforcement Issues

Existing procedures for collection and enforcement of maintenance are clearly and widely recognised to be inadequate and often totally ineffective. The National Maintenance Inquiry

investigated in some detail the existing situation and proposed the establishment of a Maintenance Agency to collect maintenance and enforce court orders concerning maintenance. A lengthy consideration of the problems involved in enforcement can be found in the Report so only a brief consideration will be attempted here. The Government's Budget announcement on maintenance foreshadowed an agency under the control of the Commissioner of Taxation to collect and enforce maintenance, presumably using the existing taxation collection and

- 16 -

Child Maintenance Reform

enforcement mechanisms, Issues which arise out of this proposal include:

(i) Any collection system must be able to locate the non-custodial parent to be effective. This requires access to information that can often be provided only by the custodial parent and by government records.

(a) The custodial parent may not wish to co-operate in the naming (in the case of ex-nuptial children) or the locating of the non-custodial parent. Fear of harassment/violence, hope for reconciliation or at least a better child/parent relationship, the existence of private arrangements designed to optimise access to social security or a wish to avoid any dependence upon the non-custodial parent are relevant factors in this context. Whatever the reason, the right of the child to parental support may clash with custodial parent's reluctance to assist maintenance agency efforts. The question then arises of the degree to which a custodial parent should or could be compelled to assist. The rights of the custodial parent and the limits on the realistic coercive options open to the agency must be considered. A conciliatory, co-operative approach, combined with public education may well make this problem largely academic or applicable to very few cases only.

(b) Government records: The information in the records of the Australian Taxation Office, the Department of Social Security, the Electoral Office and various State and Territory bureaucracies including police departments could be needed to locate and levy maintenance evaders. A basic civil rights issue arises if these sources are used. The debate on the Australia

Card proposal has addressed many of the issues in this regard. Maintenance evaders would be on a par with tax evaders or social security defrauders.

(ii) Optimum efficiency may well be achieved by using the same body to assess, collect and enforce maintenance. The Government's foreshadowed Child Support Agency is just such a body. Using the already existing branch structure and mechanisms for assessment, collection and enforcement of the Australian Taxation Office (ATO), it may provide an efficient,

cost-effective agency to fill the collection/enforcement

- 17 -

Child Maintenance Reform

deficiency in most States. However, a number of problems may arise from the activities and limitations of such an agency:

(a) Privacy issues arise in the collection of maintenance if the taxation system is used. PAYE taxpayers are taxed via their employers' pay office. The possibility exists for a privacy breach or some sort of discrimination where maintenance payment information

is accessible to employers or other staff members. (b) The equitable collection of maintenance may be dependent on the equity of the taxation collection system. PAYE taxpayers may be at a disadvantage

compared with non-PAYE taxpayers in the collection of maintenance.

3. Coverage Issues

The question arises, in maintenance reform, of who will be included in any new system. Social security recipients are the obvious group to be included. They are a clearly identifiable group in need, being dependent on government assistance. But who else should be covered and should that coverage be mandatory or voluntary? If the obligation to provide child support applies to all parents then all those children affected by family break-up should gain coverage. But is it necessary to disrupt existing efficient private or Family Court arrangements? It may be that it is impossible to assess the adequacy of existing arrangements effectively, in which case compulsory universal application may be the most equitable. and

efficient solution. This would also avoid the development of two classes of maintenance recipients; private and government regulated. The . jurisdictional split along State/Commonwealth lines with regard to ex-nuptial children and children of marriages also has the potential to cause difficulties in

coverage for a child support agency.

4. Contextual Issues

A number of maintenance system.

issues arise which concern the relationship of reform to Family Law and the social security

(i) Family Law: Maintenance has become interwoven with other aspects of Family Law over time. Property settlements often

- 18 -

Child Maintenance Reform

involve an element of maintenance in advance. For example, the matrimonial house may be awarded to the custodial parent because of the child-rearing responsibilities which s/he is undertaking. Whether account should be taken of this by a child support agency in assessing maintenance must be decided.

Access to and custody of children do not follow a uniform pattern. What maintenance arrangements can be made where custody is split between the parents (each to have one or more of the children), shared (children spend equal time with both parents) or fluid (children move from one parent to the other on an irregular basis)? Access is sometimes arranged in large blocks of time (e.g. 6 weeks). What adjustment in maintenance, if any, is suitable in this case?

(ii) Social Security: How should maintenance payments relate to social security payments? A number of options are open here, with varying results where cost, equity and adequacy are concerned.

(a) The existing payment system with strict income testing could combine with a new maintenance system to reduce government expenditure but only marginally improve thefinancial position of social security recipients

(i.e. they would receive additional allowable income before benefit payments are reduced, assuming they do not already work to supplement their pension).

(b) A liberalising of the income test would lessen government savings and increase payments to maintenance recipients.

(c) A detailed and comprehensive restructuring of child support payments could be undertaken to coincide with the introduction of new maintenance measures. Questions of the adequacy of child support and the equity with which it is distributed have concerned many in the welfare sector. Poverty traps are a major

- 19 -

Child Maintenance Reform

problem under existing arrangements and are likely to continue to be so, even after July 1987 when a more lenient income test will apply. These concerns are being addressed by the Social Security Review being conducted by the Department of Social Security during 1986 and 1987. Dr Bettina Cass is the Consultant Director of the Review. To date the Review has produced a series of Background/Discussion Papers on the

subject of Social Security reform.[1]

CONCLUSION

The next development in the reform process will, very likely, be the release of discussion papers regarding the Child Support Agency proposed by the Government in the 19 August Press Release of the Minister for Social Security, Mr Howe.[2] In that release it was stated that submissions would be invited from, and consultations conducted with, groups active in the maintenance area. Out of the ensuing debate may develop a very different maintenance system from the one which is, at present, in place.

October 1986

1. Social Security . Review, Background and Discussion Papers Series. No.l. B. Cass, The Case for Review of Aspects of the Australian Social Security System, June 1986. No.2 0. Donald, Social Security Reform, June 1986. No.3 K. Ogborn, Social Security and the Labour Force -

Looking Ahead, June 1986. No.4 A. Harding, Assistance for Families with Children and the Social Security Review, June 1986. No.5 P. Whiteford, Issues in Assistance for Families -

Horizontal and Vertical Equity Considerations, August 1986. No.6 K. Ogborn, Workfare in America: An Initial Guide to the Debate, September 1986. 2. Minister for Social Security, op.cit.

Current Issues Briefs recently published by the Legislative Research Service.

1985

No. 1

No. 2

No. 3

No. 4

No. 5

No. 6

1985-86

Brown, G., 'A Short Guide to Nuclear Weapons and Warfare Terminology'.

Beyer, M., 'The World Sugar Market and Prospects for a New International Sugar Agreement'.

Marker, A., 'Industrial Robots in Australia: an introduction'.

Makinda, S., 'The Coup in Sudan: internal and international implications'.

Angley, J., 'The New South Wales Doctors' Dispute'.

Fraser, D., 'Television and the Satellite: the story so far'.

No. 1 Angley, J., 'Identification Cards: major issues'.

No. 2 Fraser, D., 'Television and the Satellite: II. The Current Issues'.

No. 3

No. 4

No. 5

No. 6

1986-87

No. 1

Leigh, M., 'Brunei Darussalam: the price of consent'.

Fox, W., 'Australia's External Debt'.

Martin, B., 'International Terrorism: Recent Developments and Implications for Australia'.

Larmour, C., 'Affirmative Action Legislation in Australia'.

Brown, G., 'The Joint Defence Facilities as Bargaining Chips: pros and cons'.

No. 2 McCormick, W., 'The Export Woodchip Industry of South East NSW: major environmental issues.

No. 3 Kopras, A., 'Trading with South Africa'.

If you wish to receive copies of any of these publications, please contact the Publications Officer, Department of the Parliamentary Library, Kurrajong Annexe, Barton A.C.T. 2600, or phone (062) 72 7551.