The Guardian 22 June, 2005
Single parents fear
The report on the national child support scheme ordered by the Howard government has been handed down. Single parent advocacy groups are concerned; headlines like "Six in 10 to pay less for children" explain why. Fathersí groups approve of its broad thrust and have vouched for the PMís "We hear what youíre saying" claim on behalf of his government last year.
Entitled In the Best Interests of the Children ó Reforming the Child Support Scheme, the report contains the recommendations of a ministerial taskforce headed by Professor Patrick Parkinson. The document claims changing attitudes, a "greatly increased emphasis on shared parental responsibility" and the increased numbers of mothers working (particularly in part-time capacities) established the need for "reform" of the system. However, when read alongside other proposals, like the one to force custodial parents (overwhelmingly the mothers) off Centrelink benefits when the youngest child starts school, the report shows itself to be a continuation of the attacks on low-income women.
The taskforce purports to update the Child Support Scheme, which was introduced in 1988, with a new formula to create a pool of funds from which a separated coupleís children can be supported. It is complex and, if adopted, would make a complicated system of determining payments and reporting even more bewildering. In Professor Parkinsonís new model, the custodial parentís income is also taken into account. At present, it is not a factor until that income reaches $39,000 per annum.
The proposal would set a self-maintenance figure of $16,000 a year for BOTH parents. Income above this amount would be called "Combined Child Support Income" (CSI) and would be levied on a sliding scale that takes into account the number of children, the ages of the children and the total CSI. The rate ranges from 17c in the dollar for a pool of up to $25,324 for a single child to 32c for three or more children in their teenage years. The expense of second families is factored in and there is a cap on combined adjusted taxable income of $160,386. Any income over that cap is not taken into the equation. Big winners in these arrangements would be rich fathers who remarry; they stand to save over $100 per week ó a loss of $100 per week to the custodial parent. Income from overtime and second jobs is quarantined from consideration.
The non-custodial parentís contribution is discounted by 24 percent if he (or, less often, she) meets the "standard" contact expectations of an average of a night a week and half the school holidays. A parent paying the minimum support will not have to pay anything at all if this level of contact is maintained. It is claimed that this will encourage the non-custodial parent to stay involved with their children.
However, when all the sweet-talking and all the maths are done, most single parent households are set to become worse off. Sixty percent of non-custodial parents would pay less child support. Forty percent will pay more ó the minimum amount payable by unemployed non-custodial parents will increase from $5 to $6 per week! The taskforce has recommended an increase to the Family Tax Benefit (A) to make up some, but not all, of the deficit.
The recommendations open up new minefields regarding access. The fulfilment of the contact requirements for child support discount would undoubtedly lead to disputes involving the parents and the agency. It is another clumsy attempt at "one size fits all" intervention in these matters; the first was when former Family and Community Services Minister Larry Anthony proposed compulsory 50/50 time sharing arrangements on both parents with no thought for the real life consequences.
The Parkinson report is full of assumptions ó some valid and others clearly serving the Howard governmentís other agendas. It is undoubtedly true that a teenager is more expensive to support than a toddler so a case exists for increasing payments in those years. It is true that a non-custodial parentís ability to contribute is reduced when he establishes a new family ó this is factored into current arrangements. However, the assumption that simply lowering the bar on the financial obligations of non-custodial parents will increase their co-operation will have to be demonstrated.
At the moment, only 13.5 percent of people pay the correct amount of support on time to the Child Support Agency. Forty percent pay less than a quarter of the child support expected of them. Twenty percent of those earning $85,000 and over are in arrears. About 40 percent (288,057 individuals) pay the minimum support of $5 per week. An estimated 100,000 fathers have not lodged tax returns in the last five years so as to avoid paying child maintenance. There is approximately $750 million owing in unpaid child support.
It is claimed that less wealthy fathers go on the dole to avoid making payments above the $5 minimum while richer dads use clever accounting; by making themselves a "company" and paying themselves a low wage, for example.
The report suggests a "tough" approach to clear up this mess. It recommends allowing the agency to access bank accounts (even joint accounts) to deduct any debts. If it appears "on the balance of probabilities" that a father has successfully concealed his true income, the agency should respond by levying child support of $20 per week per child. How all this would happen without a very large increase in the resources of the Child Support Agency is left open in the report. On its own, the administration of the 24 percent discount for maintaining contact with children would be a massive additional burden on the agency, let alone the custodial parent. At present only 500 men a year are investigated for failing to meet their child support undertakings.
Women the losers
Single parents ó women in the main ó will not be served well by the recommendations of this report. Its policy direction has more to do with the image of single mothers promoted by conservative political forces worldwide than any desire to see the sharing of responsibility for child support or the maintenance contact between non-custodial parents and children.
The current system ó levying a percentage of a working fatherís before-tax income according to the number of children ó does produce anomalies. It does create severe financial difficulties for some categories of low-income non-custodial parents ó not all defaulters are cheats. The system obviously needs refinement and help with the enforcement of its arrangements, but the proposed new system will only leave mothers and children worse off.
The latest report does nothing to solidify the "vagaries" of child support from a former spouse. It gives no recognition to the fact that it is overwhelmingly the custodial parents, women in the vast majority of cases, who are pushed into poverty with the break-up of the family.
It promotes the governmentís "mutual responsibility" agenda and will drive more single parents into the uncertain routine of the low paid, casualised workforce at the expense of the children.