The Australian Child Support Scheme – background and key featuresCath Halbert, Group Manager, Payments Policy Group, the Australian Government Department of Social Services

Presented at the HCCH conference on the Recovery of Child Support and Family Maintenance in Asia Pacific and Worldwide

HCCH Asia Pacific Week 2015, Hong Kong, 10 November 2015

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The AustralianChild Support Scheme – background and key features

1. Size of the Scheme2. Objectives of the Scheme3. Objects of the legislation4. The Scheme and its development5. How the Scheme works6. Features of the Scheme7. Compliance activities8. International arrangements9. Australian international cases by country

Overview:

The Australian Child Support Scheme – background and key features 3

Size of the Scheme

• The scheme manages just under 800,000 cases on behalf of approximately 1.3 million parents and carers

• There are approximately 1.2 million children involved in the scheme

• Just over half the caseload (53%) payments are transferred privately between parents, with the remainder collected by the Department of Human Services

• Around $1.5 billion is collected and transferred via the Department of Human Services per year

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Objectives of the Scheme

• Parents share in the cost of supporting their children according to their capacity

• Adequate support is available to all children not living with both parents

• Commonwealth involvement and expenditure is limited to the minimum necessary for ensuring children’s needs are met

• Work incentives for both parents to participate in the labour force are not impaired

• The overall arrangements are non-intrusive to personal privacy and are simple, flexible and efficient

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1. Cabinet Sub-Committee on Maintenance, Child Support: discussion paper on child maintenance (1986), p.14

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Objects of the legislation

• To ensure children receive a proper level of child support from their parents after separation in accordance with the parents’ capacity to pay

• Financial support should be assessed without the need for court proceedings

• Children should share in the standard of living of both parents

• Payments are made regularly and on time

• Australia is in a position to give effect to its obligations under international arrangements

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History of the Scheme and its development• Introduced in 1988 in two stages

– stage 1, from June 1988, involved the registration and collection of court orders

– stage 2, from October 1989, provided for formula assessment

• The Australian Government Department of Social Services (DSS) has responsibility for child support policy and legislation

• The Australian Government Department of Human Services (DHS) has responsibility for service delivery

– Up until1998 the scheme was delivered from the Australian Taxation Office.

• Major reforms occurred from 2006 to 2008, including a new child support formula

The Australian Child Support Scheme – background and key features

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How the Australian Scheme works• Two pieces of legislation underpin the Scheme:

– Child Support (Registration and Collection) Act 1988

– Child Support (Assessment) Act 1989

• Assessments are based on the child support formula

• The formula takes into account:

– the costs of children,

– both parents’ income, and

– the care each parent provides for their children

• Formula takes account of different costs of children at different income levels

• DHS can register, collect and enforce payments

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• Payees can be a parent of the child or a third party carer

• A payer or payee may pay or receive child support in more than one case, for different children

• The option to lodge estimates of future income within a financial year

• Relevant dependant allowance

• Fixed annual rate / minimum annual rate

• Change of assessment (COA) process

• Agreements

• Two options: private collect or child support (DHS) collect

• Non-agency payments (NAPs)

Features of the Australian Scheme

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Compliance Activities• Employer withholding

• Collecting through third parties

• Intercepting tax refunds

• Departure Prohibition Orders (DPOs)

• Deductions from social security payments

• Enforcing the lodgement of tax returns

• Income Minimisation Investigation

• Legal options

• Litigation

• Prosecution

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International context

• Agreement between the Government of Australia and the Government of New Zealand on Child and Spousal Maintenance

• Agreement between the Government of Australia and the Government of the United States of America for the Enforcement of Maintenance (Support) Obligations

• Hague Convention on the Recognition and Enforcement of Decisions Relating to Maintenance Obligations 1973

• United Nations Convention on the Recovery Abroad of Maintenance (UNCRAM)

• Non-treaty arrangements

• 97 reciprocating jurisdictions

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Australian international cases by country

22%

9%

6%

1%

62%

Out cases – Payer overseas

New Zealand

UK

USA

Canada

Other

27%

52%

4%

4%

2% 11%

In cases – Payer in Australia

New Zealand (Funded)

New Zealand (BAU)

UK

USA

Canada

Other

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For more information…

• Department of Social services (DSS) for policy:https://www.dss.gov.au/

• Child Support Policy Guide:http://guides.dss.gov.au/child-support-guide

• Department of Human Services (DHS) for administration:http://www.humanservices.gov.au

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Thank youCath HalbertGroup Manager, Payments PolicyDepartment of Social ServicesCath.Halbert@dss.gov.au

Please send any questions to childsupport@dss.gov.au