Determination of percentage of care

Percentage of care

11.96 The ‘percentage of care’ is the amount of time a parent or carer provides care for a child (also referred to as the ‘care percentage’). A person must provide at least 35% of care to be eligible for both child support payments and FTB.^[99]

11.97 The percentage of care is used in the child support formula to take into account the costs of the child that are met by a parent or carer by caring for the child.^[100] It also affects how FTB is apportioned between persons who share care of a child. The percentage of care is not equivalent to the percentage of FTB payable to the parent or carer.

11.98 From 1 July 2010, the FAO and the CSA determine percentages of care in the same way. Determinations of percentages of care under family assistance legislation apply for child support purposes, and determinations under child support legislation apply for family assistance purposes^[101]—and each agency will apply a percentage of care determined by the other agency

11.99 In the Child Support and Family Assistance Issues Paper, the ALRC identified issues regarding the percentage of care—in particular the manipulation of the percentage of care for child support or FTB purposes—as beyond the Terms of Reference,^[102] for reasons outlined in Chapter 9. However, the ALRC discussed the discrete issue of the way the FAO and the CSA determine the percentage of care, and whether this affects victims of family violence.

Child support and percentage of care

Determinations by the CSA

11.100 Amendments to the Child Support (Assessment) Act 1989 (Cth) have changed the rules for determining percentages of care from 1 July 2010.^[103] From 1 July 2010, the CSA will usually determine the percentage of care based on the actual care that is occurring.^[104] Actual care is generally based on the number of nights a person has cared for a child, or is likely to care for a child, over a 12-month period.^[105]

11.101 The CSA may request information from the parties in order to determine care patterns. The Child Support Guide recognises that actual care may be reflected in care arrangements agreed upon by the parties.^[106] Since the July 2010 amendments, care arrangements are defined by the Child Support (Assessment) Act as written agreements, parenting plans and court orders—including parenting orders and state and territory protection orders.^[107]

When parties dispute the care that is occurring

11.102 Parties may disagree about the actual care that is occurring, and provide conflicting information about how much care each is providing. The Child Support Guide indicates that the CSA encourages parents to resolve such disputes. If the parties cannot resolve the issue, the CSA will request additional information and evidence from the parties.^[108] The CSA will determine a percentage of care based on this information.

11.103 The Child Support Guide states that CSA will consider a ‘wide range of evidence’.^[109] This may include documentary records, such as diary entries, and records of visits to services, such as health care providers. The CSA may consider its records of customer contact, as well as Centrelink information. The CSA may also consider third party statements, if the third party is willing to be identified as the source of information, and the statement is provided to the other parent.^[110] The CSA has a policy not to obtain or consider information from children.^[111]

11.104 The Family Assistance Guide is more illustrative than the Child Support Guide in relation to types of evidence that may be taken into account in determining percentage of care.^[112] As the FAO and the CSA use the same rules to verify the actual care that is occurring,^[113] it is likely that the CSA has regard to the same or similar evidence. Examples of evidence which may be taken into account by the FAO are outlined below.

11.105 If the differences in the information provided by the parties cannot be reconciled, CSA will determine the care percentage on the balance of probabilities. If the CSA cannot reach a conclusion on the balance of probabilities, then the CSA will assume that the state of affairs at the time the assessment occurred will continue, and the care percentage will not change.^[114] It is unclear how the CSA makes a determination where there has not been a prior assessment.

Interim determinations

11.106 The Child Support (Assessment) Act provides for interim determinations about percentage of care in specified circumstances. In these cases, the percentage of care is not based on actual care. Interim determinations generally have effect for a period of 14 weeks, and may be extended to up to 26 weeks in special circumstances.^[115]

11.107 The CSA will not use actual care to determine the percentage of care where care arrangements (written agreements, parenting plans and court orders) are not being complied with, and the person with reduced care is taking ‘reasonable action’ to ensure compliance with the care arrangement. The Child Support Guide provides that what may constitute ‘reasonable action’ depends on the circumstances of the case. Examples may include:

• initiating court action for contravention of a court order,

• initiating mediation, through a Family Relationship Centre or other service, to re-establish the care arrangement,

• negotiating with the other parent with a view to re-establishing the care arrangement.^[116]

11.108 In these circumstances, the CSA may make an interim determination, in which the care percentage is based on the care the person should have had under the care arrangement.^[117]

11.109 The CSA may also make an interim determination where a care arrangement is not being complied with, and the person with reduced care is taking ‘reasonable action’ to make a new care arrangement, which provides the person with less care than in the current care arrangement, but more care than the actual care that he or she has. To make an interim determination in these circumstances, the CSA must also be satisfied that the person who is seeking a new care arrangement has ‘special circumstances’.^[118]

11.110 The Child Support Guide provides a non-exhaustive list of special circumstances. It includes situations where the parent could not continue to have previous levels of care due to, for example, serious medical problems.^[119] In these circumstances, the CSA may base the care percentage on the care the person would have under the new care arrangement.

Percentage of care prior to 1 July 2010

11.111 Prior to the amendments to the Child Support (Assessment) Act, the CSA generally made care percentage determinations in accordance with oral or written agreements, parenting plans or court orders related to care of a child.^[120] Where there was no agreement, plan or order in place, the CSA determined the care percentage on the actual care the parties were likely to have over the care period.^[121]

11.112 Interim care percentage determinations were available in limited circumstances where care was not occurring in accordance with an agreement, plan or order. Interim determinations were based on the actual percentage of care that was occurring.^[122]

Effect of the amendments on victims of family violence

11.113 The pre-July 2010 policy, as articulated in the Child Support Guide,did take account of the consequences of family violence for victims in the context of interim orders. However, evidence suggests that basing the percentage of care on court orders and agreements may have disadvantaged some customers, including some victims of family violence.

11.114 The Australian Institute of Family Studies report considered the link between parenting orders and financial issues, including child support. This report predates the July 2010 amendments to the Child Support (Assessment) Act, and provides a useful insight into the effect of the pre-amendment rules. The AIFS report noted that ‘family law system professionals expressed concern about child support payments being based on court order arrangements that subsequently change’.^[123]

11.115 The report also noted that parents may be reluctant to seek new court orders to reflect changes in care due to barriers such as the costs of litigation, ‘burn out’, and personal circumstances.^[124] In particular, in family violence cases, lawyers considered it an appropriate strategy not to apply to change orders, in order to avoid re-inflaming the family situation. This noted reluctance to engage with the legal system was not limited to the courts, and also applied to Family Dispute Resolution processes. Parents therefore accepted the child support consequences of having assessments based on outdated care orders or agreements.^[125]

Family tax benefit and percentage of care

11.116 The rules to determine the percentage of care in the Family Assistance Act reflect those in the Child Support (Assessment) Act, as described above—including in relation to interim determinations.^[126]Prior to 1 July 2010, the FAO based the percentage of care on the child’s ‘living arrangements’—which was not defined in the legislation.^[127]

11.117 The Family Assistance Guide provides that the FAO may consider various sources in order to determine the percentage of care, where parties disagree as to the arrangements that are in place. It provides that each party should be asked to provide evidence to support their claim, and lists a wide range of examples of evidence which may be taken into account.^[128] In addition to parenting plans, written agreements, and court orders, the FAO will consider evidence such as:

• confirmation of play group, kindergarten or school enrolment,

• proof of attendance or membership of local organisations or activities,

• receipts for expenses incurred while the child was in care,

• confirmation of care arrangements from close family friends or relatives,

• confirmation from professional members of the community who have regular contact with the family, such as teachers, police, ministers of religion, accountants, lawyers or doctors,

• social worker reports, especially in cases where there may be a fear of violence if the other parent is contacted,

• proof of travel arrangements at contact times (e.g. rail or airline tickets), and

• records from the FAO or other government agencies which may confirm present or previous patterns of care …^[129]

11.118 The FAO, like the CSA, will not seek verification about care from a child.^[130] The Family Assistance Guide also provides that, where parties do not agree on care, the FAO ‘must carry out further investigation to determine’ the actual care.^[131]

11.119 The Family Assistance Guide does not outline the applicable procedure where differences in the information provided by the parties cannot be reconciled. As the rules are aligned with the CSA, it is likely that the rules applied by the CSA to these circumstances, described above, apply.

Submissions and consultations

11.120 In the Child Support and Family Assistance Issues Paper, the ALRC asked whether the following could be improved for victims of family violence:

• the legislative bases for CSA and FAO determinations about the percentage of care;^[132] and

• the rules, as stated in the Child Support Guide and the Family Assistance Guide, for the CSA and the FAO to verify actual care when parents dispute the care that is occurring.^[133]

Child support

Percentage of care based on actual care

11.121 The Sole Parents’ Union and the ADFVC welcomed the shift to basing the care percentage on actual care in child support legislation.^[134] The ADFVC stated that

The previous system was a source of significant complaint in the ADFVC study on abused women’s financial security. That is, where violent men applied for more time with children through the courts in order to reduce their child support obligation, then failed to meet their care responsibilities. The effect of this was women receiving less child support than their actual caring responsibilities allowed for.^[135]

11.122 The Ombudsman made comments on certain consequences of basing percentage of care on actual care, reporting receipt of complaints alleging that the emphasis on actual care encourages contravention of court orders. However, they also note that the interim care determination provisions may ‘discourage non-compliance’ with court orders.^[136]

11.123 The issue of parents refusing to return a child to the primary carer, or taking a child from the primary carer, and receiving child support or FTB as a result, emerged in two case studies provided by stakeholders. The Ombudsman outlined a case in which a parent, following a court-ordered contact visit, refused to return a child to the other parent, and then advised the CSA that he had permanent care of the child.^[137]

Reliance on parties to verify care

11.124 Stakeholder comments applied broadly to cases where levels of actual care are in dispute by parents, as well as cases which are not disputed. Stakeholder comment reflected the problems experienced by customers as a result of the lack of CSA investigations.^[138] For example, National Legal Aid stated that the ‘practical difficulties’ for the CSA in determining actual care, noting that ‘institutions such as schools, child care programmes, and sporting clubs are reluctant, or do not have the resources, to provide supporting evidence about which parent collects or drops off children’. It suggested that consideration be given ‘to use of proactive investigatory powers’.^[139]

11.125 Stakeholders also raised concern about the CSA’s reliance on parties to verify actual care.^[140] The Ombudsman noted that the CSA

seem to rely heavily upon a parent either confirming or consenting to the care change that the other parent has advised, or providing documentary evidence to support their claim.^[141]

11.126 Stakeholders commented that this reliance on parents may put victims of violence and their children at risk,^[142] or might disadvantage parents who are scared to challenge the other parent’s word, unwilling to involve third parties, or ashamed to disclose their situation to friends and family.^[143] Similarly, the Sole Parents’ Union commented that victims of violence may not seek to make changes ‘because it is too difficult for them to do so and may even increase the opportunities for further abuse’.^[144] It also expressed concern that victims of violence may not be aware that their child support assessment may be changed due to care levels.^[145]

11.127 Comments were also made that parents should be relieved of their role in establishing levels of care. The CSMC submitted that:

This responsibility must be removed from the victim of violence, with the Child Support Agency, or other support service, taking on the role of verifying levels of care.^[146]

11.128 Similarly, the NCSMC commented this issue demonstrates the benefit that may be provided by a specialist team, who could collect and establish information.^[147]

When the CSA cannot make a determination on the information provided

11.129 The Ombudsman expressed concern about CSA policy—as stated in the Child Support Guide, and described above—regarding the procedure where the CSA cannot determine the care percentage based on information provided by parties, or on the balance of probabilities. The Ombudsman considered it inappropriate for the CSA simply to assume that the former care percentage continued to be accurate if the evidence indicated that it had changed:

In order to bring clarity to the child support case, we consider that the CSA should avoid relying on the status quo and, instead, always make a decision regarding the percentage of care.^[148]

Family tax benefit

Complex and inflexible framework

11.130 The Welfare Rights Centre Inc Queensland commented that the ‘decision-making framework is unnecessarily complex’ and submitted that it would be more sensible for actual care to be described as days per week or fortnight, rather than as a percentage.^[149] It also commented that:

by using a formula for making decisions on eligibility for payment based on a mathematical-sounding system, the complexity and rigidity hampers good decision making, accountability and transparency as well as effective access to review mechanisms.^[150]

11.131 Welfare Rights Centre Inc Queensland also advocated the removal of the 35% care threshold, calling it ‘empty and useless’.^[151] Similarly, the AASW submitted that the current 35% threshold is arbitrary, and leads to unjust outcomes. It argued for a more flexible system, and stated that this is ‘particularly important during the initial phases when a victim who is escaping violence is more vulnerable and in fact requires financial support’.^[152]

Time consuming and intrusive procedure

11.132 The Ombudsman noted it has received complaints from customers regarding having percentages of care and the FAO procedures for disputed care. Customers state the latter are ‘time-consuming and intrusive, in that they require customers to go out of their way to obtain and submit evidence from third parties’. Customers who have experienced family violence report feeling that ‘these disputes are another form of harassment’.^[153]

11.133 The Ombudsman comments that some customers have ‘argued that the FAO should not assist perpetrators of violence to ‘harass’ them via the disputed care process’. However, they state that

the principles of procedural fairness require that both parties affected by a potential decision have the opportunity to contribute evidence for consideration in that decision—even where one of them may be a perpetrator of family violence.^[154]

11.134 The Ombudsman suggests consideration of whether ‘law or policy around disputed care decisions could be streamlined or sped up for vulnerable customers’—in the context of the paramount requirement to balance parties’ interests.^[155]

Taking or failing to return a child

11.135 A couple of stakeholders referred to children being removed from a carer without consent.^[156] The Welfare Rights Centre Inc Queensland provided a case study which illustrates the FTB consequences of a parent taking a child:

A migrant woman’s infant was taken from her by the estranged father. He simply ran off with the stroller plus child while the woman was shopping one day. He immediately claimed Family Tax Benefit and [social security payment] Parenting Payment Single and, as there was no order in place, the mother’s FTB and [Parenting Payment Single] were cancelled.

With no income, she fell behind on her rent and was in danger of losing her accommodation, thereby making it less likely that a court would order the child be returned to her care.^[157]

The AASW made reference to the same (or a similar) case study, and commented that its members ‘report that they have worked with many similar cases’.^[158] Both the AASW and the Welfare Rights Centre Inc Queensland commented that anecdotal evidence suggests family violence—or escalation of family violence—is likely in such circumstances and that parents may be unable to have ‘reasonable discussions’ about care arrangements.^[159]

Interim orders

11.136 The AASW and the Welfare Rights Centre Inc Queensland noted that the legislation—presumably in relation to interim orders—does not provide for cases where court orders are not in place.^[160] For example, regarding the case study above, the AASW noted that as the woman had no orders in place, her FTB was cancelled.^[161] Further, Welfare Rights Centre Inc Queensland points out that even those

who do have court orders or registered parenting plans, the requirement to take ‘reasonable steps’ to recover the care of the child may be too onerous or too risky in situations of family violence. If the parent cannot show they are taking ‘reasonable steps’, they will forfeit FTB.^[162]

ALRC’s views

11.137 Legislation that calculates the percentage of care based on actual care would, on the face of it, appear to benefit victims of family violence, as well as other customers, in cases where actual care does not correspond to care arrangements ordered by courts or previously agreed on between parties. As noted above, evidence regarding the pre-July 2010 child support system suggested that parents were reluctant to update court orders or agreements—particularly where they had experienced family violence—and accepted the often detrimental financial consequences.

11.138 However, an unfortunate consequence of care percentages based on actual care is that it may financially benefit a parent who takes a child from, or fails to return a child to, the child’s primary carer. Another problematic aspect of the legislation is that it does not provide an avenue for parties to obtain interim determinations where there are no court orders or agreements in place, even when a party disrupts an established care pattern.

11.139 Aspects of the agencies’ procedures for determining care percentages also appear problematic. Heavy reliance on parties to provide evidence to establish care patterns may be burdensome and intrusive. Further, the CSA’s—and perhaps the FAO’s—practice of reverting to previous care percentage determinations when parties disagree on care, and their conflicting evidence cannot be reconciled, appears unsatisfactory.

11.140 Some of these issues may particularly affect victims of family violence. For example, in the child support context, where victims may once have been reluctant to initiate court proceedings for updated orders, they may now be reluctant to challenge information and evidence provided to the CSA or the FAO by a person who has used family violence. Victims may also be reluctant to enter into procedures to deal with actual care disputes, particularly given the agencies’ reliance on parties to provide evidence.

11.141 However, these issues generally affect the broader customer population, and are systemic in nature—as are the potential solutions. While reforms are not proposed to address this issue, as this would be beyond the Terms of Reference,^[163] the ALRC does consider that this is an area requiring further attention.

11.142 The ALRC therefore considers that DHS and other relevant departments and agencies should review the family assistance and child support laws regarding determination of percentage of care. Any such review may be complemented by research regarding the effect of the amendments introduced by the Child Support and Family Assistance Legislation Amendment (Budget and Other Measures) Act 2010 (Cth). The role of the CSA and the FAO in conducting investigations regarding care percentages should also be reviewed.