Devaluing children in their 'best interests'

The Child Support Taskforce report is ironically titled “In the Best Interests of Children”. The irony lies in the reality that for most children of separated parents, the taskforce recommendations would mean having less to live on in the household where they spend most of their time.

The taskforce plans to decrease the support to children of separated parents will work in the following ways:

• The child support percentage rate for children aged 0-12 is to be reduced from 18 per cent to 14 per cent, and although it will climb to 20 per cent when children are aged 13-17, the child will spend more of its child support dependency at the lower rate;
• The amount of earnings the resident parent has before child support liability of the payer is reduced will drop from the current threshold of $39,000 to $16,883 or one third of male average full time weekly earnings; and 
• The child support liability of payers will be cut by 25 per cent when they see the child between 14-34 per cent of the time.

In practice these changes result in cuts to the income of resident parents who have care of the child and bonus dollars for the parent who does not have care of the child.

For example, a parent of a five-year-old living on Parenting Payment Single with 100 per cent care of the child and an ex-partner earning $50,000 will lose $10 a week and the non-resident parent will be $20 per week better off compared to the current system. If the non-resident parent sees the child one night a week, they will pocket an extra $47 a week and the resident parent will lose $24 a week compared to the current system. These figures have been calculated taking adjustments to Family Tax Benefit Part A into account using the current data for Family Tax Benefit rates and the Maintenance Income Test.

The taskforce report argues that reversing the 2000 decision to distribute Family Tax Benefit payments between separated parents on a percentage basis once the non-resident parent sees the child above a 10 per cent threshold, will compensate resident parent households for the losses in child support under the proposals. The new plan would let the resident parent once again keep 100 per cent of the Family Tax Benefit payments when they provide between 66-100 per cent of care. While this restores FTB support to the household where the child’s costs are actually being met, it does nothing to compensate the resident parents whose ex-partners see the child for less than 10 per cent of the time. Only 40 per cent of non-resident parents see their children fortnightly or more frequently, according to ABS data published in June 2003, so according to this data, only 40 per cent of resident parent households will get any positive change from this measure.

The cuts to child support for resident parent households also need to be considered in the light of recent national data on financial outcomes for families after separation. NATSEM research in 2005 identified that resident parents’ incomes fell by an average 42 per cent on separation and stayed low, while the non-resident parents’ earnings dropped by an average of 8 per cent at separation but recovered relatively quickly. The Australian Institute of Family Studies researched post-separation family finances and published a report in 2000 which also identified that the parent with primary care of the children was overwhelmingly more likely to be living in poverty and that the non-resident parent was generally not experiencing poverty, even when child support was paid.

A further context of cuts to the level of support for children of separated parents is the evidence of widespread avoidance, delay and minimisation of child support which means that 40 per cent of the payer population pay the minimum rate of $5 or less. Under the new proposals the “five dollar dads” won’t pay anything if they see their children one night a week. The report recommends that the enforcement and compliance activity of the Child Support Agency be increased but it has stopped short of any concrete measures to ensure that avoidance is reduced. Around 40 per cent of the payer population do not lodge tax returns, despite being legally required to do so, but there are no real consequences for defying the law. The children bear the consequences for the non-compliance of these non-resident parents.

The most common consequence of the Child Support Taskforce recommendations will be less financial support for children of separated parents. Fathers’ groups are happy to crow that giving non-resident parents more money is helping their children, but it will be harder to explain to the children themselves that they are better off because their father is paying less to support them. Children of separated parents have been given a message that they are worth less, and that living on less money is in their best interests. The children are likely to see through this “logic” for the nonsense it is, but the politics of father’s rights supremacy mean that their voices don’t count for much.