1. Background to the review

The registration and collection aspects of the Child Support Scheme were introduced in 1988, and the formula for assessment in 1989. The formula for assessing child support was based upon recommendations of a Consultative Group chaired by Justice John Fogarty of the Family Court, which reported in 1988. The current Scheme grew out of concerns about the effects of marriage breakdown on the living standards of children, especially those living in sole-parent households with their mothers. There was also concern about the increase in the numbers of separated parents dependent on welfare; low amounts of child support being paid by non-custodial parents; and the difficulties in updating and enforcing child maintenance obligations through the courts.

Although there have been numerous modifications to the formula over the years, the fundamentals remain unchanged. The basic formula under the Scheme requires liable parents to pay a percentage of their taxable income after a self-support component is deducted ($13 462 for a single non-resident parent in 2005). The percentages are 18 per cent for one child, 27 per cent for two children, 32 per cent for three children, 34 per cent for four children, and 36 per cent for five or more children. The formula reduces the liability of the non-resident parent where the income of the resident parent exceeds the level of average weekly earnings for all employees (currently $39 312). The Scheme also provides for departure from the formula on a limited number of grounds through a process called Change of Assessment.

To a considerable extent, the Child Support Scheme has achieved the objectives that successive governments have given for it. The Scheme has also been successful in promoting community acceptance of the idea of child support obligations. However, much has changed in the circumstances of Australian families since 1988. There is now a greatly increased emphasis on shared parental responsibility, and the importance of both parents remaining actively involved in their children’s lives after separation has gained much greater recognition. Child support policy can no longer just be concerned with enforcing the financial obligations of reluctant non-resident parents. Ensuring the payment of child support is one part of a bigger picture of encouraging the continuing involvement of both parents in the upbringing of their children.

There have also been other kinds of change that affect child support policy. Since the late 1980s, there has been a substantial increase in the workforce participation of mothers, particularly through part-time employment. Children in intact families tend to be supported from the incomes of both parents. The Government is refocussing its income support and work participation policies to treat both parents as potential labour force participants with the aims of improving family wellbeing over the longer term and reducing welfare dependence.

It is against the background of all these changes since the late 1980s, as well as the ongoing public concern about aspects of the Child Support Scheme, that this review has taken place. This review was initiated in response to the House of Representatives Committee on Family and Community Affairs report on child custody arrangements in the event of family separation (Every Picture Tells a Story, December 2003). It recommended that a ministerial taskforce be established to examine the child support formula. The Prime Minister announced the Government’s acceptance of this recommendation on 29 July 2004 and the Taskforce, aided by a Reference Group, began its work shortly thereafter. Members of the Taskforce had expertise in one or more of: social and economic policy, family law, family policy, and the costs of children. Membership of the Reference Group was drawn from advocacy groups representing child support payers and payees, and also included professionals who have experience in issues concerning parenting after separation, relationship mediation and counselling, and social policy.