8. Helping parents to agree
8.1 The role of Family Relationship Centres
The new Family Relationship Centres can play an important role in helping separated parents to understand the Child Support Scheme and discuss issues about child support obligations. Group information sessions should draw attention to the flexibility built into the Scheme, in particular through change of assessment applications. Parents should be encouraged also to discuss issues such as paying for childcare costs and plans for future schooling, especially where a private school education was contemplated before separation.
Planning for Family Relationship Centres should involve close collaboration with the Child Support Agency and Centrelink, both of which may be able to provide an information and advice service on the premises of the Centre on a regular basis, perhaps once per week or fortnight. They may also be able to provide input to group information sessions. Both agencies have particular experience in being able to provide advice and assistance to people in regional and rural areas who do not have ready access to face-to-face services. This experience should be drawn on in working out how Family Relationship Centres can service regional and rural Australia.
8.2 Giving parents time to work out arrangements
Currently, the operation of the FTB system is such that parents who seek more than base rate FTB A must apply for child support almost immediately, at a time when little discussion may have occurred between the parents about the parenting arrangements after separation.
To give parents more time to adjust to the separation and to discuss a parenting plan, the Taskforce proposes that there should be a moratorium on the requirement to apply for child support (the Maintenance Action Test - or MAT) for 13 weeks. In that period, FTB should be determined as though the MAT has been satisfied.
8.3 Child support agreements
The rules on the making of child support agreements can lead to serious disadvantage to payers, payees or the taxpayer, depending on the circumstances, and need to be revised. Parents need to be given as much flexibility as possible in making their own agreements on child support, but there need to be sufficient safeguards to ensure that agreements that have long-term financial consequences for the parents and children are freely and fairly made, and are not used to increase costs for the Commonwealth.
Parents should be able to make binding financial agreements in relation to child support on the same basis as they can do for property, superannuation and spousal maintenance under the Family Law Act 1975. A binding financial agreement is only valid if the parties to it have independent legal advice. Agreements made other than through a binding financial agreement should be terminable by either party on one month’s notice at any time after the first three years of the agreement.
Where an agreement is made for the payment of less child support than would be required under the formula, FTB should be calculated each year on the basis of the amount of child support that the formula would have required if the agreement had not been made. This will have the effect that no agreement can reduce child support for a parent at the expense of taxpayers.
8.4 Lump sum child support
The current rules of the Child Support Scheme make it difficult for parents to make agreements about the payment of some child support in a lump sum, including in the form of property, even when this would be of advantage to both parents in establishing themselves in different households after relationship breakdown.
Certain provisions that inhibit parental agreement about lump sum child support are no longer needed to protect the Government from increased expenditure on FTB. Parents ought to be able to make binding financial agreements concerning lump sum child support. As with other types of child support agreement, FTB ought to be calculated on the basis of the amount of child support that the formula would have required if the agreement had not been made. Default rules for working out the impact of lump sum child support on periodic liabilities should be provided in the legislation, in order to make it easier for parents to reach a binding financial agreement on this issue in appropriate circumstances.
The proposed reforms will also make it easier for courts to make lump sum awards of child support where appropriate.
8.5 Scope of legislation
In order to ensure that the powers proposed are available to all parents and not only those who were married to one another, the proposed new provisions concerning binding financial agreements and capitalised child support should be contained in the child support legislation.