Zali Steggall MP speaks to the Child Support and Family Assistance Technical Amendments 2024

20 March 2024


I rise to support the Social Services Legislation Amendment (Child Support and Family Assistance Technical Amendments) 2024. We know child support is often a fairly vexed and contested area in family law. Sadly, having practiced as a family law barrister, I know very well it is often an area of quite acute contention, where there are fears of control and abuse that have come from the debates and the arguments around the payment of child support and where the financial insecurity of a parent with the predominant care of a child means the payment of child support can be used as a tool to manipulate, control and harass. Then there is also the vexed question where people feel the system is taking advantage to withhold time in exchange for greater payments and support through child support.

There has been an incredible number of inquiries looking into our child support system, and there have been a number recommendations around how we can make it fairer and also more reflective that ultimately parents bear a financial responsibility for the children they bring into this world and, as such, that responsibility remains regardless of changes of circumstances and breakdown of relationships or decisions to remarry and have further children. That responsibility, once you have had children and brought them into this world, remains. I don't know that the system currently properly reflects that. I support this amendment in terms of this tweaking of the rules, but I would encourage the government to go further and to look more fully at this question because it is vexed and many people feel very strongly about this system.

Currently child support payments are calculated based on parents' total income divided by the proportion of care they provide to the child or the children. A set amount is subtracted from parents' own costs and then payments are worked out using a cost-of-children table. For example, parents' own costs is often a vexatious question depending on repartnering and whether further children are had and what additional costs come under the parental responsibility. Then also the cost-of-children table is problematic because it is very hard to say that one-size-fits-all meets the cost of children, especially if there are special needs or additional considerations. So you often see tension in this system. The parents' own costs are calculated by a measure called the 'male total average weekly earnings'. I urge the government to consider amending that descriptor, because even just the way it's described seems gender biased.

Our Warringah office hears from single parents struggling with the cost of living and some are additionally impacted by the unfairness of the child support they receive or pay, with it not aligning with the percentage of care they are doing. We have heard from single parents who have the added impact of domestic abuse. They want policy that takes into consideration the financial impact of this. I commend the government and the Attorney-General, who have already introduced a number of reforms when it comes to the Family Law Act in relation to where domestic violence interacts with the system.

Today, the technical amendments in this bill provide an opportunity as well to talk about the broader issues with the child support system. The child support system in Australia is decades old and, I would argue, needs wider, more fundamental reform. It's a fact that, today, 40 per cent of marriages end in divorce and a number of non-marriage relationships end as well. So it is sadly a frequent event that there has to be, on the breakdown of relationships, a sorting out of the financial responsibility to children. According to the Australian Institute of Family Studies, the proportion of divorces involving children under 18 is 48 per cent. So very, very frequently children are involved.

People are impacted by the breakdown of family relationships, and the current cost-of-living pressures are adding to those pressures felt by single-parent families. Sadly, as an advocate, I saw all too often how financial pressures bring on the breakdown of relationships, but the breakdown of relationships exacerbates and brings on greater financial pressures on the individuals involved. Caring for children costs money, and the higher the percentage of time that parents spend with children in their care the greater the impacts are on their weekly expenditure—there's no doubt about that. I urge the minister to review that table when it comes to the cost of the child, because I would argue that some of those formulas are quite outdated and certainly don't always take into account all the particular circumstances of a child.

We know as well that unfortunately the payment of child support is also frequently weaponised and used to withhold support and to impose a level of duress on the ex-partner and, by association, on the child. Too often the parents are so involved in the conflict that they lose sight of the fact that, ultimately, the person paying the price is the child. They ultimately have a responsibility to that child, having decided to bring that child into this world. About one-third of all parents paying child support have fallen behind, and it is predominantly men that have that liability. Collectively they owe some $1.7 billion in unpaid child support. More worryingly, we know that the nonpayment of child support, or the withholding of child support, can be used and abused to jeopardise the financial safety of single parents and children.

A 2023 report, by several academics, called Financial abuse: the weaponisation of child support in Australia highlighted some very stark issues with our current child support system. Following the separation from their partner, women—it's not always women, but more often than not it is women—are faced with ongoing financial abuse. We know legislation has now been introduced in several state jurisdictions to start addressing coercive control and those kinds of issues, but we shouldn't have a situation where a legislated system such as child support is used as an additional abusive tool.

We know—and the statistics show—that abuse primarily affects women, who continue to carry the burden of unpaid care work in Australia, and they are overrepresented in victim-survivors of family violence. The way the child support scheme can be weaponised means the results can be devastating for mothers and their children. According to the weaponisation report, 80 per cent of women reported that their ex-partner had replaced physical abuse with financial abuse through the child support system as a way to assert coercive control. Ex-partners' coercive control was enacted, according to study participants, by threatening to reduce child support payments; to not lodge tax returns, in order to deliberately lower payments or avoid a payment increase; or to simply work off the books so that it is not reflected in a liability to child support. This stands in stark contrast to what the system was set up for, which was to ensure that children are financially supported by both of their parents following a parental separation.

The bill at hand identifies and deals with what Services Australia identified in 2023: the concerns that the 2018 amendments to child support and family assistance legislation were not operating as intended, because of unclear drafting. Instead of strengthening the interim period provisions, the 2018 amendments unintentionally limited the circumstances where an interim period can apply. A Federal Court ruling in February found this to be the case, and, under the current legislation, an interim period can only apply at the start of a new child support assessment or family tax benefit claim when the breach of the care arrangements occurs at that point.

Under the amendments in this bill, there are a broader range of circumstances where interim periods will apply for child support payments. What are interim periods, and why are they so important? They're often used as part of court orders to determine a percentage payment that a parent must make as part of child support arrangements. Where that level of care is established is dependent on the size of the child support payment. Interim periods are also used to ensure a parent withholding care does not financially benefit through higher family tax benefit payments.

I should note that there have been changes to the Family Law Act, through the Attorney-General and amendments, in relation to that withholding of time and contravention of orders. There is this horrible nexus between abusing the system, of withholding care at times, and seeking to increase financial support or child support payments. Too often, parents are already in a high-conflict situation and feel that the other is using the system to punish, abuse or take advantage. We need to make sure the system works in a way that avoids those kinds of situations. An interim period in which care might have changed, or when there's a withholding of time prior to a decision by the court, will be simplified so that these things can't be used to ensure that the withholding of care will mean a financial benefit through a higher family tax benefit payment or impact on child support.

I support this bill. These amendments are important, and they affect a large number of Australian families. Families don't need the added stress and time of chasing up payments that they're entitled to—invariably, single parents, and women. It should be up to the government to make sure that a fair system is in place. The amendments in this bill would see that existing rules apply to protect children and parents who are at risk of domestic and family violence. If a care arrangement has changed due to fear of violence or neglect, Services Australia will be able to ensure that child support and FTB payments are based on actual care and that an interim period doesn't apply. I understand that changes will be put in place under the amendments to make sure that interim period decisions made since the 2018 legislation will be brought into line. This should be done to minimise the impact on parents and carers who may otherwise be disadvantaged financially when having these decisions disrupted.

But where can we go from there? I would argue to the minister that we certainly need to review the definitions used in the act, including the definition that identifies male total average weekly earnings. This is problematic and should be changed as a definition. I think we also need to look at some of the issues identified in the 2023 weaponisation report. The government could look at the feasibility of implementing a guaranteed child support payment, where it would underwrite and pay child support up-front. It would be the recovery agent from the parent with the liability to pay, as it is from a tax point of view. This would take away the pressure and responsibility of being the cop on the beat when collecting those child support payments for single parents who are already struggling and dealing with the impacts, usually, of domestic violence and abuse. The government would then seek collection of payments and enforce compliance on the parent paying, whilst ensuring that violent ex-partners are not rewarded for abusive behaviour. The government already recovers payments through the tax system and it would be of assistance to single parents if the government stepped in in this way and underwrote support. We wouldn't have the situation where single-parent families, frequently women, go without any support but still have the responsibility of meeting costs for the children.

As I said, the current formulas used within parts of the child support system are out of date. They don't properly reflect the cost of a child to the parent who is the primary carer. In this instance, the current formula reduces the financial contribution to the children they already have when there's a change of circumstance or if there's a decision to have further children. The situation then means that the cost of the existing children falls disproportionately on the other parents. Again, this gives rise to added tensions and I think it should be better addressed.

Many situations have been investigated, and panels established by the government in 2023 could contribute. One is the Child Support Stakeholder Consultation Group, which provides a direct voice to government about issues impacting on families. I look forward to seeing what recommendations come out that system. Its membership includes national peak bodies and organisations representing separated parents and their children, or who provide services, programs and other expertise related to separated parents and their children. Then there's the Child Support Expert Panel, which includes academics with expertise in child support research, family law and expenditure data. Its scope is more focussed and technical in nature than that of the stakeholder group; it will provide oversight of research into the cost of caring for children and will develop a methodology to review the child support formula on a more regular basis to ensure that it continues to reflect the cost of raising children in Australia.

There are fundamental problems with the system. It's very difficult to come up with the right formula, and I don't think there's any government which has come up with the magic wand. There are definitely tensions where child support payments are linked to nights of care; sometimes parents have daytime care of children and that's a disproportional financial burden as opposed to a time burden. I'm encouraged that the minister is engaging with the issue, and I urge the government to go further, to try to bring the child support payment up to modern-day standards.