Did you see the news today that the child support scheme is so complex that only a handful of experts can understand the rules?
If are you one of the 1.5 million divorced and separated parents who pay or receive child support, you probably already know this.
Twenty years ago, Australia’s child support system was considered world class. We were one of the first countries to put in a system to ensure fathers paid their way when family breakdown occurred. It significantly reduced the number of families dependent on welfare to support children and ensured that many women and children were no longer living in poverty. However, the system also assumed that most children lived with their mothers, that dads earned more than mums and it didn’t really account for blended families.
Since then, Australian families have become more complex. The child support system as it was originally intended didn’t allow for what are sometimes known as ‘constellation families’ – where parents have children, break up and then both go on to have other families with new partners, who may or may not support the original family.
Many dads also started to spend more time with their children and in many cases they are now the primary carer. This is excellent news for the children in these families, but the child support system didn’t allow for an easy calculation about who should be paid what when children spent a significant amount of time with both parents. Both the Howard and Rudd Governments have updated the system in an attempt to reflect these changes, but it seems that the result is a system no one understands.
As the Sydney Morning Herald reports today:
The reforms were promoted as being fairer to mothers and fathers, encouraging more contact between children and non-resident parents and reducing conflict between parents.
But they were opposed by some women’s groups who feared mothers would receive reduced child support and family tax benefits. As well, there were concerns fathers could insist on children having more overnight stays simply to reduce child support payments.
Under the new rules, instead of child support being based on a non-resident parent’s income, it was based on a calculation of what children cost; and instead of reductions in child support payments kicking in when children spent 30 per cent of the week with a non-resident parent they began at 14 per cent, or one overnight visit a week.
”Where judicial officers and mediators were once able to do a quick calculation of child support liability on the back of an envelope, they now need to enter information into the [agency’s] online Child Support/FTB estimator,” said Professor Smyth.
Few surveyed parents knew that one overnight stay would trigger a 24 per cent reduction in child support; most did not know the connection between payment and stays. About 70 per cent did not understand the rules. Less than one in 10 understood the rules correctly. But 20 per cent who claimed to know the rules were wrong.
If you’ve ever been personally affected by the child support system, you’ll probably have a strong view.
It’s a government policy that enters the lives of families exactly at the point of breakdown – and significant stress – and makes important decisions about the financial arrangements of all involved post separation.
For what it’s worth, I believe that all parents should contribute to a child’s family upbringing and if that means one parent has to provide money to the other, that is too bad. I also believe that it shouldn’t matter if your former partner has married someone who may be well off – they are still your kids. But family breakdown leaves everyone worse off, including financially, so there is often no easy outcome.
However, a system that is too hard for anyone to understand isn’t ideal either. I suspect it’s time to design a new system rather than review and tinker with the one we’ve got. We need new modelling on the costs of children, and some basic principles of fairness to guide the system that allows for all family types.
No government will ever keep everyone happy in such circumstances, but has the system got so complex that no one can ever understand it?
And what does it mean for affected families that their incomes are affected by a policy no one understands? Do we need to start again? What principles should guide our child support system?