Outdated & broken: the truth about Australia’s child support system

by | Mar 26, 2024 | 0 comments

It’s outdated, hopelessly flawed, and it has not kept pace with inflation. Now, the Federal Government is reviewing the child support system, and as many single mothers will attest, there’s a lot that needs to be changed.

Fixing the broken child support system has been an issue that CSMC has been fighting for longer than most of us can remember. To begin with, the method of calculation is ridiculously outdated, not taking into account things like the cost of childcare, laptops and school uniforms, and medical expenses.

And with 84 per cent of people who pay child support being men, you’d better believe this is a single mother issue.

Professor Kay Cook from Swinburne University of Technology, recently told ABC News that even if child support is required, it’s often not being paid.

Last financial year there was a $50 million difference between what parents on the child support scheme owed and what was collected.

About one third of all parents in the scheme (that’s around 218,000) have a child support debt, and collectively they owe $1.7 billion in unpaid child support. No one knows the additional amount that is privately agreed to and not paid.

The minimum a parent can pay is $9.50 a week, or about $500 a year. We’d laugh if it wasn’t so completely outrageous to suggest that any child can be supported on $500 a year.

Professor Cook explained the importance of child support being paid not just to the children of a family, but for society as a whole.

“When child support is received in full and on time, it makes single mothers 21 per cent less likely to be in poverty,” she said.

According to Professor Cook, one of the biggest problems with the way the government calculates child support is that it doesn’t factor in the costs for parents who care for children during the week, including childcare and after-school care, back-to-school supplies, medical bills, technology, excursions and other extra-curricular activities.

The current formulas also don’t take into account children with special needs who may need medicines, therapies and specialist appointments.

The system also doesn’t take into account the fact that primary parents often have reduced earning capacity because they have to balance paid employment with caring responsibilities.

At last, the system is being reviewed

For the first time in two decades, the Federal Government is reviewing the child support scheme, but please note that the committee is not taking public submissions at the moment. We will let you know when that changes.

CSMC believes that any review should look at the issue of compliance and how child support payments work with the Family Tax Benefit. This is because, amongst other issues, if child support is months or years late and then paid in a lump sum, the receiving parent has an automatic debt to government for FTB received based on a lower rate of child support.

It should also look at the current ability of paying parents to self-report reduced income, without evidence, which is often manipulated to reduce their payments. If income is underestimated, it falls on the other parent to submit paperwork to dispute their claims, a burden we see is unfair and out of reach to most struggling single mothers. Not submitting annual tax returns (as everyone is required to) is a key tool used to manipulate the system to reduce a payers’ income, and it is one that the ATO could take action on.

We believe change is possible. The government has already earmarked $5.1 million to implement changes suggested by a recent review into the Family Law system, which included establishing its Child Support Expert Panel to research the costs of children, review the child support formula and develop a new Costs of the Children Table.

CSMC is advocating for change that reflects the real costs of raising children and that ensures that fathers pay a reasonable amount, when they should, without burdening single mothers with the costs and pressures of chasing them.

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