Break-up Blues: Who Pays Under the New Child Support Laws...

Published for portfolio only from the original

Story by: Wenee Yap
October 10, 2007

Fathers post-divorce or separation will likely pay less under new child support reforms introduced following a major review of how child support is assessed in Australia. In what UTS Associate Professor and family law specialist Geoff Monahan describes as the "scheme we had to have" the reforms ushered in by the Child Support Legislation Amendment (Reform of Child Support Scheme - New Formula and Other Measures) Act 2006 effectively turn the existing assessment procedure on its head.

"In a nutshell, you look at what mum earns and what dad earns and put it together - like an 'intact' family," said Monahan. Then you deduct the minimum income you need to live on - your 'self support' amount, often based on relevant government pension figures - and for the non-primary caregiver, who are largely fathers, a further deduction amounting to costs incurred while the child or children were in their care. Such deductions could amount, as in one hypothetical example, to thousands of dollars less in child support paid by non primary caregivers - a boon to fathers' lobby groups, particularly those who have moved into second families. While Monahan noted an increase in Family Tax Benefits paid to primary caregivers, most of whom are mothers, who will now receive 100% of the benefit, the reality is that the overall child support amount will be less than under pre-2006 legislation.

Having undergone at least five major reviews in nearly twenty years, the new scheme was forged from a "handout approach" to recasting "child support as a partnership between parents and the government. [Child welfare] maintenance comes from families first," said Monahan of the government policy behind these reforms. "The government will top it up when appropriate."

"Big winners will be income-earning men - and women. The old formula was regarded as cutting in too hard on the liable parent; so there are no apologies for the reforms. Worst off," observed Monahan, "will be 'welfare-to-work' people," including those on low to no income.

Apart from revamping formulas for child support assessment, the reforms also encourage reconciliation between warring parents, allowing for separation and child support proceedings to be suspended for six months and, said Monahan, "easily reactivated" if attempts to patch things up fail.

Also squarely within its gun sights are "deadbeat mums and dads. In the late 1980s a grim statistic was being used to back calls for reform - that only 30% of eligible mothers were getting any child support at all. Of those," Monahan noted, "only 10% were getting child support regularly. A lot of fathers weren't paying their way." Under the new laws, said Monahan, substantial funding is directed to child support fraud, with an estimated $60 million successfully clawed back.

What's the final word on the child support reforms?

"There's a simplistic elegance to the thinking: take what mum earns and what dad earns, put it together and work from there. At the end of the day, what's the alternative? Back to court? Or some rigid, fixed formula? At least this new formula has flexibility," and an expanded right to appeal administrative child support decisions, said Monahan. "Don't forget - the theory is that children get more expensive as they grow older," he joked in closing. "I call it 'the power of speech.'"