Title: CHILD SUPPORT BILL 1987: First Reading
Date: 9 December 1987
Bill presented by Mr Howe, and read a first time.
Title: CHILD SUPPORT BILL 1987: Second Reading
Date: 9 December 1987
Speaker: Howe The Hon B.L. (BATMAN, SOCIAL SECURITY, ALP, Government)
Source: House
Mr HOWE (Batman-Minister for Social Security)(7.30) - I move:
That the Bill be now read a second time.
This Bill is the centrepiece of the Government's child support scheme. Many Australian families over the last 10 years have experienced the pain of marriage breakdown. That is something governments can do little to help-but government can take action to alleviate dramatic and sustained drops in living standards for children in those families. Poverty has for too long been the traumatic result of marriage breakdown for children in sole parent families. This Government is committed to ensuring that by 1990 no child need live in poverty. The child support scheme is central to achieving that objective.
This Bill will set up stage one of the scheme to ensure that parents who have the capacity to pay do not abandon the financial responsibility of supporting their children to the social security system. This Bill will make the legal right of children to be supported by both their parents a real right. We will turn what for most children is an empty promise into solid, regular financial support. Over half of the 800,000 Australian children in poverty are in sole parent families. Those families depend on pension and benefit and those payments are the only source of income for most of them-more than 70 per cent of non-custodial parents do not pay regular maintenance for their children. This scheme will increase the number of families receiving maintenance, increase the level of that maintenance and will ensure that it is received on a regular basis.
The enforcement of child maintenance has been recognised as a significant social problem in major Western countries, such as the United States of America. While those countries have adopted various collection mechanisms, the problem has continued and they are now piloting the approach we are about to adopt in this country. We are in a unique position to be able to use our family law, taxation and social security powers under the Constitution to integrate a national system. In addition to the Child Support Bill 1987, it is necessary to enact two other pieces of legislation to give full effect to the first stage of this scheme.
My colleague the Attorney-General (Mr Lionel Bowen) recently introduced into the Parliament the Family Law Amendment Bill 1987 which will, when enacted, provide for child maintenance obligations to be given priority over all commitments of non-custodial parents, other than those necessary for their own support. That Bill will also put an end to the practice of maintenance being essentially nothing more than a top-up to social security benefits, by preventing the courts from considering social security eligibility when making orders that relate to maintenance. A further Bill, which I propose to bring before the Parliament early next year, will amend the Social Security Act 1947 to provide for changes to the way maintenance is treated in the social security system.
I turn now, Mr Deputy Speaker, to outline briefly the essential features of the Child Support Bill. Effective collection of maintenance has never been achieved in this country. The only way to ensure that children receive the support to which they are entitled is by a collection system that does not depend on voluntary payment. The deduction of maintenance automatically from salary or wages guarantees in the vast majority of cases that regular financial assistance is provided. The Bill will establish a Child Support Register which will record details of maintenance liabilities that will be enforceable under the Bill. There will be a Child Support Registrar who will be responsible for the administration of the Bill and the keeping of the Child Support Register. Under the Bill, the Child Support Registrar will be the Commissioner of Taxation. The Registrar will administer the Bill through a section of the Australian Taxation Office to be known as the Child Support Agency. A Child Support Agency within the Australian Taxation Office is best equipped to perform this task for three reasons: the Tax Office has an existing relationship with employers, who under the scheme of the Bill will be required to deduct maintenance from the salary or wages of liable employees; the Tax Office can best trace those persons who seek to avoid their obligations under the Bill; and the Tax Office has substantial experience in the enforcement of financial obligations.
The Bill is drafted in such a way that all child maintenance liabilities that are payable on a periodic basis under a court order or a registered maintenance agreement are registrable on the Child Support Register. In my statement on 24 March this year, I outlined the parameters that would be applied to limit the population to be covered by the scheme.
The Child Support Agency will collect periodic child maintenance that relates to children of parents who separate after the commencement of this Bill, or-where the parents have not cohabitated-to children born after that day. In all cases where the person receiving the maintenance is in receipt of an income tested pension, allowance or benefit, the Child Support Agency will be able to collect the maintenance. The Child Support Agency will take over the functions of State collection agencies. It will collect any orders lodged with those agencies on the date their functions are taken over. It is proposed to establish these parameters by regulation so that if in the future there are sufficient resources to extend the scope of the scheme it will not be necessary to amend the Bill.
A significant feature of the Bill is that in the vast majority of cases maintenance will be deducted automatically from the salary or wages of liable parents. The effect of this automatic withholding is that regular payments are assured to custodial parents. The Government rejects the suggestion that automatic withholding be imposed only when default in payment occurs. Overseas experience is that a default will almost certainly occur in the two years after an order for payment is made. Stigma attaches to automatic withholding if it is imposed upon default and this would detract from the success of the scheme. The enforcement of child support has been recognised as a problem in the United States since the mid-1970s. Those States that have adopted less effective collection mechanisms to overcome this have found that the problem has continued and are now moving to the approach we have adopted. In some cases it will simply not be possible to impose automatic withholding and in these cases the liable parent will be required to pay the maintenance directly to the child support agency.
The Bill also provides a statutory mechanism which ensures the payment to custodial parents of moneys paid over to the child support agency. The Bill contains strict secrecy provisions for Commonwealth officers and for employers regarding any information obtained through their involvement in the scheme. The Bill provides comprehensive appeal and objection rights to all parties affected by the registration of a maintenance liability coverered by the Bill. Since my announcement of 24 March this year the Government has decided to extend the scheme to cover spousal maintenance where that maintenance is payable in conjunction with registrable child maintenance. In addition spousal maintenance will also be collectable by the Child Support Agency in respect of individuals who are 45 years of age or over and in receipt of an income tested pension, allowance or benefit. Spousal maintenance will also be collectable where the order or agreement has been lodged for collection with a State collection agency and the Child Support Agency takes over those functions.
The revenue effect of all these measures was estimated for 1987-88 Budget purposes to be net gains of $7.6m in 1987-88 increasing to $192.8m in 1989-90. Finally, Mr Deputy Speaker, I would mention that the Government intends to improve on this first stage of the child support scheme with the introduction as soon as is practicable of a system of formula assessment of maintenance obligations. Effective collection of maintenance is only part of the problem. Levels of child support awarded by the courts or agreed upon by parents have been consistently inadequate when compared to the real cost of raising children. The provisions of the Family Law Amendment Bill giving child support a priority over all commitments of the parents, other than those necessary for their own support, will in part redress this problem. The Child Support Consultative Group, under the chairmanship of Mr Justice Fogarty of the Family Court of Australia, will be advising the Government on elements of that formula early next year. The child support scheme is a major initiative of this Government of which Australians can be proud. It may be the forerunner for other countries to examine in addressing the real problem of child poverty. I commend that Bill to honourable members. In doing so, I present the explanatory memorandum on this Bill, further copies of which will be available tomorrow.
Debate (on motion by Mr Braithwaite) adjourned.