Scope of the Inquiry

Terms of Reference

9.8 The scope of this Inquiry is limited by the Terms of Reference, which direct the ALRC to consider improvements to legal frameworks to protect the safety of victims of family violence.^[5] Chapters 9–11 consider how the safety of victims of family violence may be improved by reforms in the area of child support.

9.9 Consequently, the ALRC will not examine a range of issues which—while they may affect victims of family violence—have relevance to a range of CSA customers and the operation of the child support scheme. Reforms to address these issues would be systemic, and beyond the Terms of Reference. Alternatively, recommending narrower reforms that address the effect of these issues solely on victims of family violence would introduce a two-tiered operation to aspects of the child support scheme.

9.10 The ALRC rejects as inappropriate a two-tiered system that would subject victims of family violence to substantially different practices and procedures than other CSA customers. It would compromise the integrity of the child support scheme, and may disadvantage the general CSA customer base.^[6]

9.11 Systemic issues that are beyond the Terms of Reference are identified below. Stakeholders also raised numerous compelling issues of a systemic nature in their responses to the Family Violence and Commonwealth Laws—Child Support and Family Assistance, ALRC IP 38 (2010) (the Child Support Issues Paper)—some of which are mentioned in this chapter and Chapters 10 and 11.

Matters outside the Inquiry

Avoidance of child support obligations

9.12 Some payers may avoid their child support obligations by minimising the income that is factored into the child support assessment. Participants in one study identified a range of tactics used by payers to minimise child support assessments, including: listing income under a business name, not declaring entire incomes, and working cash-in-hand.^[7]

9.13 Payers may also avoid child support by paying child support late or irregularly, paying less child support than the assessment, or not paying at all. These issues may be particularly prevalent where payees collect privately. Where the CSA collects child support, it has a range of coercive powers to effect payment, as discussed below.

9.14 Avoiding child support obligations may be linked with family violence. It has been identified as ‘part of an ongoing attempt to maintain power and control’,^[8] and an extension of other forms of family violence.^[9] It may also, in itself, constitute economic abuse.

9.15 Avoidance of child support by payers is an issue that affects a broad range of payees, including those who may not be victims of family violence. Addressing this issue may require systemic reforms to the child support scheme that are beyond this Inquiry’s Terms of Reference.^[10]

9.16 The ALRC will, however, consider reforms to protect victims of family violence who, due to fear of or coercion by the person who has used family violence, opt for private collection of child support—and are, therefore, more vulnerable to non-payment or underpayment of child support.

Investigatory powers of CSA

9.17 Child support legislation empowers the CSA to conduct investigations, however the CSA is not required to conduct any inquiries or investigations in making administrative assessments.^[11] The Child Support (Assessment) Act 1989 (Cth)also provides that the CSA may—but is not required to—conduct inquiries and investigations in making determinations about changes to child support assessments (also referred to as ‘departure’ determinations).^[12]

9.18 The ALRC understands that the CSA does not, in practice, actively investigate cases. Consequently parents and carers may need to investigate the other parties’ financial circumstances themselves—for example, to support a change of assessment application. Where parents are unable to do this, they may be financially disadvantaged.^[13]

9.19 This issue is relevant to victims of family violence, who may be ill-equipped to investigate the assets and income of persons who have used violence against them. However, the adequacy of CSA investigatory powers, and the degree to which CSA uses its existing powers, is a broad issue in relation to the child support scheme, and will not be explored at large by the ALRC in this Inquiry.

Percentage of care

9.20 The ‘percentage of care’ is the amount of time a parent or carer provides care for a child. A person must provide at least 35% of a child’s care to be eligible for both child support payments and FTB.^[14] The percentage of care also affects the amount of child support and family assistance entitlements. This is an area where child support and family assistance laws intersect with family law.

9.21 It is possible that parents may seek parenting orders or agreements under the Family Law Act 1975 (Cth)that will affect the child support assessment under the Child Support (Assessment) Act, or FTB under A New Tax System (Family Assistance) Act 1999 (Cth).

9.22 The Evaluation of the 2006 Family Law Reforms by the Australian Institute of Family Studies (AIFS), released in December 2009, considered whether child support is relevant to positions adopted by parents in relation to parenting arrangements under the Family Law Act. Parents may wish to increase their care percentage to reduce their child support liability or, conversely, resist a reduction in their care percentage to maintain their child support entitlements.^[15] Maintaining or increasing family assistance may also provide such motivation.

9.23 Manipulation of care arrangements to alter the child support assessment may affect victims of family violence, potentially motivating persons who use violence to seek more time with their children to minimise their child support assessment. However, this issue is not limited to cases of family violence. Reforms to child support and family assistance legislation to address the issue would be systemic in nature, affecting the child support formula and the rules for determining FTB. As discussed below, reforms to ensure family violence is suitably considered in determining parenting arrangements should be—and have been—aimed at the family law system.

9.24 While the legislative use of percentage of care for child support and family assistance is beyond the reference scope, in the Child Support Issues Paper, the ALRC raised for consideration the rules to determine the percentage of care—particularly in those cases when parents dispute the facts in relation to care provided. This is discussed in Chapter 11.