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Ministerial Speech

Senator the Hon Joe Ludwig
Minister for Human Services

6 November 2008

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Family Relationship Services Australia Inaugural National Conference, Cairns

Australia’s child support system – looking to the future

Thank you for inviting me to this conference in Cairns and for the opportunity to talk with you.

Before I begin, I’d like to acknowledge the traditional owners of the land on which we are meeting, and I also pay my respects to elders past and present.

Acknowledgements:

• Ursula Stephens, Parliamentary Secretary for Social Inclusion
• Matt Miller: General Manager CSA.

Today I want to talk about three key points:

1. We have a fairer child support scheme in place which should be allowed to be bedded down. Minister Macklin and I have said we would continue to monitor the system closely.
2. We will continue to focus on improving the effectiveness of compliance and enforcement as an important element in improving the overall efficacy of the Scheme.
3. There are opportunities still out there for government to better help separated and separating families by looking to join up service delivery across the broader family law system.

I recognise it has been a period of significant change for stakeholders and service providers as the Child Support Agency has been bedding down the new formula.

I also recognise these reforms have a big impact on your work because many of you are supporting parents to avoid separation, or mediating after separation, particularly around child support agreements and shared care of the children.

I believe the implementation stage has been successful. It has been a long journey getting to this point, as some of you will intimately know. There was the House of Representatives Committee Inquiry “Every Picture Tells a Story”, the Ministerial Task Force “In the Best Interests of Children”, the legislative process and the hard road of implementation.

Thank you for the effort you as community service providers have put into supporting separated parents through the Government’s Family Law and Child Support Reforms. You have worked with parents to help them, understand the nature and effect of the reforms. And you have a crucial role of working with Government to help us bed down these major changes.

It’s time to take stock of where we are and look ahead.

The role for Government and the CSA in particular, now shifts to monitoring how well the new system is working. But it’s just as important to look for ways we can further enhance the outcomes for separated and separating families who find themselves in the Family Law system.

First, let’s look in more detail at the new Child Support Scheme.

1. Better and fairer system

The new scheme is now fully operational and its implementation has been a success. Having said that, there will be teething problems - that’s why I want to learn from you where the pressure points are in this massive new system that transfers $2.8bn for children.

In terms of fairness, the key elements of the new child support formula include 2 important changes:

1. The incomes of both partners are dealt with on an equal basis.
2. Child support recognises both the share of care of the children, and the real cost of raising children, based on independent calculations.

These two key elements of the child support equation – the incomes of both partners and the share of care – interact. For example, if the incomes of both parents are equal and the care is shared 50/50, then there is no transfer from one partner to the other. In cases where one partner’s share of combined income increases, so does the obligation. Similarly, as the share of care increases, the child support obligation falls in proportion.

The system balances in a fair way income earned with care undertaken.

Most important, parents are encouraged to share parental responsibilities. This promotes the original vision of Child Support legislation introduced in 1989 - that parents share the cost of supporting their children according to their capacity to pay, while providing adequate support to care for the children.

In short, the new scheme is, as I have stated, a better and fairer system.

I recently released research commissioned by the CSA and carried out by the Open Mind group. This study clearly shows increased support for the new child support scheme.

This contrasts with the results of the same survey earlier this year, before the start of the new scheme. It showed there was concern about the impeding scheme, with only 58% of paying parents expecting the new initiatives to make the system fairer. But in August, after the scheme’s introduction, this had risen 17 percentage points to 75%.

If we take the average of the first three research periods (May and August 07 and February 2008) on the issue of whether changes improve fairness, we measure a positive response in about 62% of cases. The three-quarters acceptance of the scheme in the latest results is more positive than I expected.

The research also shows 76% of paying parents now believe the formula is more balanced. All previous responses had a 4 in front, a three-year average of about 43% acceptance. This too is a positive shift.

It’s also pleasing to see receiving parents share this positive view of the new arrangements.

Between February and August this year, the number of receiving parents who believed the new formula is more balanced jumped 11 percentage points - from 52% to 63%. The first three times the survey was conducted, a positive result was received in an average of only 51% of cases. The most recent responses are much more positive.

But we know some parents don’t see the new Scheme as a positive change. This is understandable given the enormity of the changes. Some parents will only judge their position by comparing it to that under the outdated scheme.

It was widely recognised that something had to be done about the old system. There were constant complaints from paying parents and receiving parents.

The rigid nature of the old system set up a platform for conflict. It set a standard percentage as payment for each child – with little consideration of the circumstances of the paying parent or the receiving parent.

The system needed an overhaul – and the legislation setting up the new scheme passed through Parliament with bipartisan support.

The first phase of the new reforms began operating in July 2006, only after three years of research, feedback and review. The Government will continue to monitor how the new scheme is operating over the next 12 months.

2. Improving the effectiveness of compliance and enforcement

I now turn to my 2nd theme - the importance of continuing to improve compliance and enforcement activities. We must deliver more timely and complete child support payments to receiving parents and strengthen the integrity of the system.

I strongly believe a fair formula and a fair Scheme cannot be genuinely fair until the obligations assigned under the Scheme are in practice actually met. I am determined and unshakeable in my resolve to ensure children get the financial support they are entitled to under the new formula.

This is all the more important now we are in the postimplementation and monitoring stage.

The Government’s investment of $161m over 4 years in increasing CSA’s compliance and enforcement activities is resulting in very significant increases in child support collections and building improved integrity and confidence in the system. So far, over 400,000 customer actions have been taken and nearly $140m collected in outstanding child support.

Earlier this year in June, I launched the CSA’s new Compliance and Enforcement Strategy and announced additional initiatives to enhance the effectiveness of this work.

I am pleased to report that since that time, another key Memorandum of Understanding has been affected between CSA and the Department of Immigration and Citizenship to share information on passenger movements and facilitate more timely enforcement intervention where appropriate.

Separated parents are recognising these positive gains – that’s something also contained in the research. This is important because it builds confidence in the integrity of the new scheme. Despite these positive trends, I believe we have a way to go in getting child support payments to flow better:

• We still have a large number of parents who are not lodging their tax returns within a reasonable time, often leading to underpayment of child support until returns are lodged.
• We have an estimated 30,000 parents who may be deliberately avoiding their child support responsibilities through use of income minimisation schemes.
• Many people have multiple child support cases in arrears.
• Total child support debt has increased to over $1bn.
• Only half of paying parents with child support collected by CSA pay in full and on time.

Going forward, I have requested the CSA focus on improving the timelines and completeness of payments, as well as continuing with enforcement actions to collect outstanding payments. More timely payment of child support will help ease some of the financial pressures facing separated parents.

I would also like to flag the importance of developing an appropriate response to the issue for many separated parents - dealing with non-compliance with court ordered access for parents to their children.

No matter how often we say contact and payment are separate issues and mutually exclusive, in the minds of parents, they are linked.

This examined in the Family Law Council’s report into Improving Post-Parenting Order Processes.

The Government is now considering its response to the report.

We have made huge strides in terms of intensive collection of child support debt for that minority of parents who do the wrong thing. A good example of these intensive measures is Departure Prohibition Orders. They target those parents leaving the country with a large child support debt to avoid paying child support.

I think there is recognition that parental ordered enforcement is an issue needing attention. I have been discussing the issue with the Attorney General.

Until we have an effective enforcement regime in place for those parents who continue to flaunt contact orders or prevent the other parent from seeing the children, the balance achieved under the new formula will be threatened.

The third area I would like to discuss today is joining up Child Support with the rest of the Family Law System.

3. Joining up service delivery Child support across the broader Family Law system

As Minister for Human Services, I am responsible for service delivery. My job is to have a customer focus and come up with better ways of making the Child Support Scheme work with the other parts of the system.

In light of the reforms implemented over the past 3 years, now is a good time for all of us to consider what more we can do to better support separating and separated families.

In addition, recent upheavals in financial markets have created significant stress for some families. I note that Relationships Australia in October 2004 stated that concerns about finances was rated as a major pressure on relationships by just 18% of people. But just two years later, the figure had skyrocketed to 40%. The Government has responded quickly with the $10.4bn Economic Security Strategy package. It will put more money in the hands of most families from 8 December. But clearly, families are facing increased stress - which will place pressure on relationships.

The 2001 Out of the Maze Report by the Family Law Pathways Advisory Group – what a well entitled report it was – said that for many people the system is more like a maze then a co-ordinated and supportive network of services. As Minister for Human Services, it’s my job is to deliver an uncomplicated system.

The Advisory Group concluded that to address the problems and weaknesses in the system, Government activities should:

• increase the focus on children;
• create opportunities and pathway choices for family decision making;
• improve the consistency and availability of information;
• improve coordination nationally and regionally;
• promote safety;
• support fairness in the process; and
• meet family needs as they change.

My part in the process is to make these ideals become reality, through improved service delivery.

As you have heard from the Attorney-General, there have been achievements:

• This year we have opened 25 family relationship centres, 14 children’s contact services and 22 early intervention services.
• To assist high conflict families, 14 post separation cooperative services in regional areas have been established.
• The Attorney-General has also announced at this conference new accreditation rules for family dispute practitioners based on new standards of competency.

But there remains unfinished business from the valuable Pathways work. We can do much more to reduce the fragmentation in service delivery and the complexities inherent in the system today.

I am sure we all agree separating and separated families are confronted by a complex and largely fragmented service delivery system. The various agencies and departments in this sphere want to do better, but they need to co-operate more. Families needing to access the system and its services, struggle to make sense of what it is they should do.

We need to do two major things. The first is to refocus our efforts on preventative strategies to reduce the likelihood of separation. We can work towards identifying the high risk cases. Specialist players including Centrelink, CSA and other providers have the data and parental contact to identify when families could benefit from some investment in early intervention. Having the data is only one thing.

Having said this we all recognise that in circumstances such as domestic violence immediate intervention is required. The second task is to link up. We can improve connections and referrals between special services across all levels of government and non-government.

The focus on early intervention initiatives should include:

• Improved access to parent support services such as financial counselling
• Improved referral processes
• Greater use of Family Relationship Centres in realising agreement between parents on their respective parenting responsibilities
• More holistic approaches to parents’ circumstances by Centrelink and CSA.

Sharing data and information to identify need and risks is an area for us to work on in the coming year. There is also value in looking to how we can improve the linkages between the courts and the administrative arm, and between the stakeholders and the decision makers.

The 2001 report of the Family Law Pathways Advisory Group found that families experiencing separation make contact with the system at a variety of service gateways. The system design needs to built around a new reality – that all service providers within the system will become gatekeepers to the whole system. After initial assessment of needs, the system should provide information from all the various avenues of support. It would then determine the most appropriate pathway for that particular family, guiding them through an effective referral process.

One possible response to this problem is to pursue a more family friendly entry point to the Family Law System. This integrated portal could provide an easier entry point, where the various referral pathways can be identified for the parents.

It’s time to consider these strategies, given the evaluation work being done on the Family Law Pathways activities.

I can advise progress is being made is in the area of system-wide roadmaps to help families navigate the system and access the right service when they need it. Work is underway within the Child Support National Stakeholder Engagement Group (of which, FRSA is a key member) to develop on-line “road maps” for families. Once these are developed, we will also have paper-based tools for those without access to the internet.

This approach fits well with what we are doing in the Human Services portfolio. We are seeking to deliver reform, improvements and efficiencies around how we work and link up with services. Child protection is one particular example where we have agreed more can be done and will be done over the coming months to do more for children at risk. Similarly, we need to ensure we capture appropriate linkages into support networks for parents experiencing domestic violence.

I have asked my Department through the CSA to explore how we can start on this new work over coming months. At the same time, I will continue discussing these opportunities with my Ministerial colleagues - Hon Jenny Macklin, Minister for Families - and the Attorney-General Robert McClelland.

Conclusion

To conclude.

The three elements I have outlined today are mutually reinforcing. We have a better and fairer system, a more balanced system. It will continue to work only through separated parents complying with their obligations.

We need a tough compliance regime and better support for separated families.

The results of CSA’s research indicate that the child support community appears to have accepted the recent changes and is moving forward in a number of positive areas. I want to consolidate this progress and seek opportunities to support separating families in caring and providing for their kids through better connected systems.

I agree with my colleague the Attorney-General that each part of the system – the family relationship services, legal aid, community legal centres and the courts – needs to work seamlessly with other parts of the system.

In addition, the Child Support Agency and Centrelink also need to be more integrated into delivery of services in the Family Law System.

Integrated approaches would assist proactive, early prevention rather than remedial activity.

There is much going on in Government and in the sector to deliver better outcomes for the families and for the children. But I think we can do more.

And what greater inspiration do we need to push further reform than the goal of achieving better outcomes and support for Australian children.

Media Contact

Sarah Cosson — 0423 823 843.