House of Reps proceedings 17 February 1988 Part 1

House of Reps proceedings 17 February 1988

Title: CHILD SUPPORT BILL 1987: Second Reading
Date: 17 February 1988
Source: House

Debate resumed from 16 February, on motion by Mr Howe:
That the Bill be now read a second time.

upon which Mr Connolly had moved by way of amendment:
That all words after `That' be omitted with a view to substituting the following words:

`whilst not declining to give the Bill a second reading, the House wishes to ensure the protection of the rights of non-custodial parents who have entered into maintenance arrangements to share in the cost of supporting their children at no extra cost to the Commonwealth, by not requiring these agreements to be registered with the Child Support Agency, except in the event that maintenance arrangements are not honoured'.

Title: CHILD SUPPORT BILL 1987: Second Reading
Date: 17 February 1988
Speaker: Snow Mr J.H. (EDEN-MONARO, ALP, Government)
Source: House

Mr SNOW (Eden-Monaro)(10.01) --The developments within the Government Party leading up to the Child Support Bill 1987 have been very extensive. I congratulate the Minister for Social Security (Mr Howe) on the long process of consultation during which he has been associated with not only members of the Government Party but also the general public and organisations right across Australia. I believe that those intensive discussions have led to legislation which, in many ways, will be a world show- piece. The Minister and the committees of the parliamentary Australian Labor Party have had extensive discussions with not only sole parents but also non-custodial parents, organisations and community representatives, all of whom, I believe, have contributed to this successful piece of legislation.

The discussions which I have had with non-custodial parents, for instance, have brought their problems to the fore. As we consider the problems of supporting children-the children of sole parent families-we need to consider some of the concerns of non-custodial parents, particularly the problem of access. Access is a formidable task for any government, even a court, to have to confront because every case is individual and different. There are non-custodial parents who are unable to look after their children. There are others who dearly love their children and who may be as good as or an even better parent than the custodial parent, the person who has been awarded custody. So inevitably there must be conflict in the unhappy position in which such families find themselves.

Being a sole parent is overwhelmingly a female problem in Australia. The honourable member for Moncrieff (Mrs Sullivan) made that very clear in her speech. Recently I saw three female non-custodial parents on three occasions. I noticed that in each case there was quite severe distress and that seemed to me to contrast with the feelings of male custodial parents who seem, quite often, to manifest anger and resentment. These people do have problems. Many of the problems arise from conflicts which exist in the community about how we should deal with the poverty facing sole parent families in particular. There is a lot of conflict in the community.

Traditionally, people say that young girls have children to get social security benefits, but I have seen little evidence of that. When I have examined individual cases I have found that the accusation, in most cases, is quite unwarranted. If it were true, simply to have children would be no great way of accumulating funds, because all the evidence shows that the poorest people in the community are families with children; and, of those, the sole parent families are the poorest.

I know that occasionally there is abuse, but my experience more recently is that the Department of Social Security has become much stricter in policing the use of its social security benefits. Now I am finding that the number of cases of abuse are no more than the number of cases of harsh treatment alleged by the Department. Both are much lower than they used to be. We need to be a little less judgmental in the way in which we deal with sole parent families and a closer look at the problems needs to be taken. We do not even have to have compassion; we can have concern about the national economy and still appreciate that it is pointless being judgmental.

In the months over which discussions have taken place we have learnt a number of things. Firstly, sole parent families have become an increasing burden on the Australian taxpayer-not because of sponging, even though that takes place at no more than the same level in other areas of abuse, including taxation, but because 70 per cent of non-custodial parents are not paying their way. Non-custodial parents do not always share the responsibility of procreation. Notice- ably, men are not always aware of being equal partners, at least, in the formation of a child, so the taxpayers have been left carrying a burden. Various means have been taken to ensure that the child support agency which is being set up will work. The long preparation which has occurred will mean that the Child Support Bill will work. I congratulate the Minister for Social Security for the co-operation that he has extended to the community. Non-custodial parents must be taken into account, especially the problems that some have with access. Many of them have a case and many do not. This must be examined properly.

I am pleased that at the same time as the Government has been working on this legislation it has been looking at the legal aspects and the attitudes in, the practices of, and the counselling services in the Family Court, and the way in which they are helping or hindering the interests of both custodial and non-custodial parents. I am delighted at the way in which the Attorney-General (Mr Lionel Bowen) and the Minister for Social Security have accepted that it is the children we must be most concerned about. They both have accepted that, and that is why this legislation and the legislation that will accompany it will be successful. I am pleased to support the Bill.

Title: CHILD SUPPORT BILL 1987: Second Reading
Date: 17 February 1988
Speaker: Ruddock Mr P.M. (DUNDAS, LP)
Interjector: Madam SPEAKER
Source: House

Mr RUDDOCK (Dundas)(10.09) --I welcome the opportunity to address the House on the Child Support Bill. I do so as one who has taken an interest in this subject over a long period. Although honourable members like the honourable member for Eden-Monaro (Mr Snow), who spoke prior to me, gave credit to the Minister for Social Security (Mr Howe) for introducing this particular Bill and commended his involvement in the issue and his consultation with members of his own Party and with the community, I simply note that the development of adequate maintenance provisions in our Family Law Act and adequate provisions for enforcement of maintenance payments where they have been ordered has been a matter of contention for a long period.

The laws in this area have been developing over a long time and the proposals now before the House, to my recollection, were certainly developed as early as 1978, and in 1980 when the Joint Select Committee on the Family Law Act reported. I might say that the Attorney-General (Mr Lionel Bowen) was a member of the Committee when it dealt with the questions and was one of those involved in the deliber- ations which brought forward recommendations on which the child support agency is based; it is really the son of one of the specific proposals of the Joint Select Committee on the Family Law Act, and a provision which I believe deserves support and which was worthy of support a good deal earlier under the previous Government and under this Government.

I want to take the opportunity to outline the provisions of this Bill as I understand it, the other amendments to the Family Law Act and the Social Security Act which are part of this scheme. They are further developments which are to occur and which were also foreshadowed in the Joint Select Committee's report on the Family Law Act. This Bill provides for the collection of certain periodic child and spouse maintenance payments payable under court orders and agreements which parties may have reached for the payment of maintenance. It provides for the establishment of a Child Support Register to be administered by the Child Support Registrar, who will be, as I understand it, the Commissioner of Taxation.

The Bill also provides for the creation of a child support debt, whereby a child or spouse maintenance payment formerly payable to a former spouse-a person called the `payee'-under an order or agreement becomes, for the payer, a debt due to the Commonwealth. In other words, a person who has an obligation under a maintenance agreement or court order will now be obliged to pay maintenance as a debt due to the Commonwealth. There are provisions for the termination of the liability in certain circumstances and the scheme provides that, so far as practicable, the collection of periodic child or spouse maintenance be by means of automatic withholding deductions from salaries and wages of employees. We are told that the provisions are based very much on the provisions under which the pay as you earn (PAYE) instalment deductions scheme operates under the Income Tax Assessment Act. The collection of periodic child or spouse maintenance by means of direct remittance on a monthly basis for those who are not the subject of PAYE instalment deductions is also provided for. Of course, payment of maintenance collected by the Child Support Registrar will be effected by the Department of Social Security in the scheme that is outlined.

Maintenance that becomes unpaid will be a liability that is payable to the Commonwealth. Presumably the Commonwealth and the child support agency will have to take steps to recover moneys that may not be covered by the collection of periodic payments or the automatic withholding deductions. There are penalties for employers and for payers for various offences, such as late payment and failing to provide information to the Registrar, and there are objection and appeal rights in relation to those matters.

As I understand it, shortly stated, that is the scheme by which this legislation will operate. As the Minister for Social Security said in his second reading speech, that is one part of a scheme for child support. It is part one of the first stage. Of course, other legislation amending the Family Law Act which we discussed at the end of last year provides for child maintenance obligations to be given priority over all other commitments of non-custodial parents other than those necessary for their own support. I will come to that in discussion of the recommendations of the Joint Select Committee on the Family Law Act. This is an important development. It means that in future, when people move into reconstituted marriages, accepting new obligations, those new obligations will not be given greater priority than the obligations to maintain children and to provide some support to a spouse in a divorce or other such situation.

We have seen a very significant change over time whereby the obligations to support children and families have shifted from parents-from spouses-to the state. One of the significant impacts of the proposals before us will be to reduce pension payments and to place greater reliance on maintenance collected by the Commonwealth. The amendments to the Family Law Act are the second part of the total scheme we have before us. The third part deals with the Social Security Act and provides for changes to the way in which maintenance is treated in the social security system. I have outlined generally the scheme covered by the Bill before us which, coupled with the other two Bills that will come before us dealing with amendments to the Family Law Act, which we have already discussed, and amendments to the Social Security Act, will give effect to the first stage of the scheme the Minister has announced.

I want to put this matter in context because the financial consequences of divorce were the subject of very detailed discussion in chapter 5 of the report tabled in 1980 by the Joint Select Committee on the Family Law Act. The report recorded the history of the development of maintenance Acts in the various States of Australia from 1840. Maintenance has always been an important question and was first addressed by the States. There was very often a lack of uniformity and, when people moved from one State to another, there was difficulty in recovering the amounts that might otherwise have been ordered to be paid by the courts or that might even have been the subject of agreements. In the 1960s all the States substantially revised their maintenance Acts in an attempt to achieve uniformity, but even at that time it was obvious that those sorts of arrangements were not altogether satisfactory. In the 1960s we saw the introduction of the Matrimonial Causes Act in which the Commonwealth assumed, with the establishment of its divorce court system, a responsibility in the matter of maintenance. Maintenance in marriage and divorce situations became a matter of Commonwealth responsibility and purview. Before that, as I said, a great deal of that responsibility lay with the States.

We saw other changes as well. In the beginning the question of fault was important. The question of whether one party had deserted another was an important one in determining whether maintenance might be payable, and even under the old Matrimonial Causes Act that situation remained. One of the principal reforms in the area of family law occurred in the 1970s with the introduction of the Family Law Act, when the Commonwealth further attempted to remedy the fragmented jurisdictional problems that existed in relation to property and maintenance, and we saw the elimination of fault as a factor in relation to the obligation to pay maintenance, particularly for children. Different arrangements were put in place for the collection of maintenance, which was left largely in the hands of the parties themselves.

At the time the Family Law Act came into place there was a great deal of discussion about the relationship that ought to exist between the Family Law Act and the Social Security Act. Of course, there was provision in section 75(2) (f) of the Family Law Act whereby in determining maintenance obligations account would be taken of the eligibility of either party for Commonwealth or State pension benefits, and any rate of pension, allowance or benefit being paid to either party.

The Joint Select Committee noted particularly in its report that the interpretation of this provision caused many problems. I must say that it was certainly a matter of great concern to the Committee and it was a matter to which the Senate Standing Committee on Constitutional and Legal Affairs gave consideration in its report on the Family Law Act when it was a Bill. Let me quote from the Joint Select Committee's report because it gives an indication of the thought that was being given to this question even in the period 1974-75:

While the orders for maintenance and custody currently made by magistrates under State jurisdiction are substantial in number, the Committee recognises that a large part are caused by the Statutory requirement that deserted wives must apply for an enforce orders before their eligibility for (or continuance of) a deserted wife's pension is approved. We recommend that s. 62(3) of the Social Services Act . . . be amended to dispense with this requirement. It is a cause of unnecessary litigation and disharmony and the Department should be empowered to recover contributions from husbands without this requirement. Furthermore, Clause 52(2) (e)-

that is, section 75(2) (f) as it ultimately became in the Act-

of the Bill already contemplates taking into consideration of pension entitlements on applications being made for maintenance orders. This change should reduce substantially the volume of maintenance applications.

Of course, that is exactly what happened. We saw a significant growth in the payment of pensions attributable to marriage breakdown following the introduction of these provisions. The Joint Select Committee, in its report, commented particularly:

However, this growth precedes the introduction of the Family Law Act, and has been particularly apparent since the introduction of the tapered means test in 1969 which halved the severity of the income test as it applied to income and property in excess of the allowed free area; (b) the liberalised means test in 1972 which doubled the amount of income or property allowed before the means test commenced to operate; (c) and the introduction of the Supporting Mothers Benefit in 1973 and its expansion to the Supporting Parents Benefit. . .

So the Joint Select Committee found that other factors were involved besides the amendments to the Family Law Act, but it went on to record in its report some of the artificial arrangements that developed afterwards to ensure that pensions were payable in the maximum number of cases. I have noted that, under the provisions of the Family Law Act where parties could agree to their arrangements, people would agree to arrangements which would maximise the pension payable and increase, as substantially as possible, the amount of income that was needed to maintain two separate households rather than one. It is obvious that, when people separate and two households have to be established and kept, costs increase. The question is: Who ought to incur those additional costs? Should those costs be charged against the general pool of taxpayers' funds or should they be charged to the parties themselves, particularly when they are in a position to afford it?

We have seen, particularly where people agree, that very often these arrangements will be predicated on the basis that one spouse will apply for a social security benefit and the other spouse with an income will top up, by indirect means, the income that is available to the divorced spouse. The indirect means can often be by payment of the chemist bill, the department store account, the costs of running a motor vehicle or the payment of school fees. A whole variety of mechanisms have been used and agreed to which minimise the payment of maintenance that would otherwise be taken into account in assessing pension eligibility. I have to say that my experience was, as the Joint Select Committee deliberated on this matter, that the courts were sanctioning these arrangements. The responsibility had shifted from the parties to a marriage where there was a breakdown to the taxpayers. This led the Joint Select Committee to look at the whole scheme. We suggested amendments to the Social Security Act to require the courts to take into account these other matters. We also suggested the development of a scheme whereby the Commonwealth would take over responsibility for collecting maintenance. Under such a scheme pensions would be paid as they had been in the past but the Commonwealth would take over the responsibility of collecting maintenance to reimburse the Crown for pensions that might otherwise be paid.

We were influenced particularly by developments that were occurring in New Zealand and the United Kingdom. In New Zealand a Supplementary Benefits Commission was empowered to recover the amount of benefits paid to a client from a liable relative under the provisions operating there. In the United Kingdom, as a result of the recommendations of the Finer Committee on One Parent Families, a scheme was developed which became the basis of recommendation 23 in the Joint Select Committee's report. Time does not permit me to outline fully the nature of those recommendations except to say that it was our intention that the Department of Social Security would undertake the responsibility of assessing and determining the particular amounts of maintenance that would be repaid. At the moment these questions are still left in the hands of the courts or the parties themselves to determine. Of course, the responsibility for collection, as a result of a decision by the Government, has been handed to the Commissioner of Taxation.

This has been an interesting development. When the Joint Select Committee brought forward its report I was informed that the Department of Social Security was particularly unhappy about the recommendation. Obviously it won in the fight between departments that must have occurred. The Department of Social Security did not want to be a collection agency. It saw its role as being a payee organisation rather than a collecting body. It felt that its image would be harmed if it had to go out and be involved in ensuring that the Commonwealth's revenue was not attacked in this way. I must say that I was not particularly pleased to see that approach. Obviously the Government was influenced. The matter has been put in the hands of the person who is otherwise seen as an ogre, I suppose, by taxpayers. The Commissioner of Taxation has the obligation. The Minister said in his second reading speech that he sees the Commissioner of Taxation as having experience in collecting funds and, therefore, he is better placed to undertake this role.

Madam SPEAKER --Order! The honourable member's time has expired.

Debate continued.......part 2