The Guardian 8 March, 2006
Government plan to
send more single mums into poverty
Last week, the Federal Government announced a major overhaul of the child support payment system that is to be phased in from July and which will cost $850 million over the next four years. Does this seemingly sizeable outlay mean that parents struggling to raise young children will be getting more financial assistance from the Government or their former partners? Not unless you count an increase in the minimum child support payment from $5 to $6 per week! Head of the ministerial taskforce and one of the new scheme’s architects, Professor Patrick Parkinson admits that "Where there are younger children, yes, I would expect the [change] will produce lower outcomes."
Family and Community Services Minister Mal Brough defended himself in the media against the charge that the "reforms" would send single mothers further into poverty and relieve fathers of some of their financial obligation. "I’m not really focused at all on who pays more, who pays less. I’m looking at the equity of the children. I’m looking for a change in values in some of the parents to value the child more than money", he told The Australian Financial Review last Wednesday.
Comments made elsewhere, however, reveal that Mr Brough is very focussed on who pays what and the changes in child support arrangements show in practice that he believes fathers have been paying too much. Payments from the non-custodial partner — the father in the overwhelming majority of cases — will be made according to a new formula which includes the mother’s income. If the woman’s income is just the single parent benefit, the average of the assessable incomes will plummet like a stone.
While the circumstances of all 764,000 families presently receiving child support are to be reviewed for the changes, it is a foregone conclusion that the approximately 11,000 wealthy, non-custodial parents will be the big winners. Mr Brough is concerned that too many of his better off chums have been "subsidising the lifestyles of their former spouse". He has also arranged it so that extra income earned by the non-custodial parent after the separation will be excluded from the payments calculation for the first three years.
Furthermore, if the non-custodial parent spends 14 per cent of the nights over a year (average of one a week) with the children, his payments to the mother will be discounted by 24 per cent. Some fathers are worried that desperate mothers might try to restrict the access of the non-custodial parent to the children so as to be spared the hefty cut to their income. "What these changes mean is that if a custodial parent wants to get more child support, what she has to do is reduce the contact [with the father]", Fairness in Child Support spokesperson John Flanagan told The Telegraph last week. "We’d rather see our kids than save money", he said.
Sole Parents Union President Kathleen Swinbourne pointed out that the changes mean "just about anybody who encourages a good relationship between their children and the non-residential parent is going to end up with less money … The reality is that people who see their children one night a week are not picking up 25 per cent of the cost of the child, yet that is the discount they’re getting in child support."
Human Services Joe Hockey insists that while the financial bar is being lowered for non-custodial parents, the enforcement mechanisms are being tightened. He says he is not satisfied that only 50 per cent of non-custodial parents pay their child support in full and on time. An estimated 200,000 people owe $464 million in child support at the moment. To improve this situation, there will be closer surveillance at airports for fleeing deadbeat dads; the Tax Office will be asked to pass on the details of parents who have not lodged tax returns and there will be a doubling of the use of the courts to recover arrears.
Mr Brough tried in vain to sound downright socialist when announcing the child support cuts for the wealthy: "There are people who tell the [Child Support Agency] they have no income and yet they’re driving around in a Merc and they have a holiday home [but] because they own their own business they don’t pay themselves a wage therefore they have no taxable income. If they can’t explain that in an adequate fashion then they will be deemed to be earning an income and they will pay." The late Kerry Packer must be quaking in his grave at the announcement that the Libs are about to get tough on tax "minimisation".
Meanwhile, low income women and their children will need to brace themselves for the latest attack from this most anti-women of recent Australian Governments. The latest child support changes were announced just ahead of International Women’s Day.