The Albanese Labor Government will take the first step to make the child support system fairer for children in separated families with the introduction of legislation.
The Social Services Legislation Amendment (Child Support Measures) Bill 2023 will improve the timely collection of child support owing to parents and help prevent future debt among low-income parents.
The Bill’s three key changes – expanding employer withholding, tightening arrangements around departure prohibition orders and improving income accuracy for low-income parents – will start the Albanese Labor Government’s reform of child support.
Last financial year, $3.7 billion in child support payments were transferred between 1.3 million parents for 1.1 million children.
Minister for Social Services Amanda Rishworth said it is critical that the child support system is effective at assessing and collecting child support.
The changes in this Bill will make a real difference to the lives of single parents and their children. However, the Government also knows that there is more work to do to improve the child support scheme to ensure it is fit for purpose.
“I am keenly aware of the difficult financial circumstances facing many single parents and I am committed to ensuring these parents receive the financial support that they, and their children, are entitled to,” Minister Rishworth said.
“This Bill will help fix some of the issues with the child support system but we know there are more issues to solve, including non-compliance and the use of the system as a means of financial abuse and control.
“Australians can be assured that the best interests of children will always be paramount in any changes we make to the child support scheme.”
The Social Services Legislation Amendment (Child Support Measures) Bill 2023 proposes three legislative changes to ensure the Scheme continues to be effective in the assessment and collection of child support.
The Bill’s three changes are:
- extending employer withholding – improving the active collection of child support debt in cases which have ended by extending the circumstances where Services Australia can deduct child support from a parent’s wages.
- tightening departure prohibition orders – parents with a departure prohibition order will no longer be able to offer a refundable financial security to qualify for an exemption, unless Services Australia is satisfied they will make satisfactory arrangements to repay their child support debt within an appropriate period, and;
- improving income accuracy for low-income parents – helping to prevent debts in circumstances where low-income parents on income support are not required to lodge a tax return. The change will improve income accuracy by allowing Services Australia to deem the parent’s adjusted taxable income to be equal to the self-support amount.
The commitment to proceed with these measures recognises the importance of addressing the $1.69 billion child support debt pool that has accrued in the last 35 years.
The measures will commence from 1 July 2023, pending passage of legislation.
This Bill is a first step to make the scheme better for parents and children. In the Government’s response to the Joint Select Committee on Australia’s Family Law System, tabled in January 2023, we have committed to implement a range of recommendations to improve the scheme over the longer-term.