Child support: pay up or lose welfare

Stephanie Peatling
March 4, 2008 Sydney Morning Herald

PARENTS who fail to make child support payments will have the amount docked
from government benefits as part of tough new compliance rules.

From July 1 all parents paying or receiving child support will have their
payments adjusted according to a formula based on the cost of raising
children.

To give them time to prepare for the changes, the Child Support Agency will
start sending letters to 1.5 million parents from today.

"The last thing we want is for parents to all come to us on July 1 and say
their payments are wrong," said Trevor Sutton, the agency's deputy general
manager.

The agency is anticipating 30,000 calls a week from parents asking about the
changes. An extra 450 staff have been employed to help the agency cope with
the expected deluge of calls.

As part of the changes to child support, the agency has beefed up compliance
rules.

Parents who are not paying will face having payments such as unemployment
and disability benefits and veterans' and parliamentary pensions garnisheed.

The agency already has the power to stop people owing child support from
leaving the country.

The new system allows the agency to ask parents for more detailed
information about income and financial assets to make sure they do not pay
less than they should.

The July 1 changes are the third and final stage of the biggest overhaul of
the child-support scheme since 1988.

The Howard government was prompted to make the changes after a parliamentary
review found the scheme was inequitable and had failed to keep pace with
increased government payments to families.

Under the changes, payments will no longer be based on a percentage of the
taxable income of the child support payer.

Instead, they will be based on the parents' combined income.

Assessments will include children from other relationships.

The formula takes into account the cost of raising children, who will be
assessed in two age groups - up to 12 years and 13 to 17 years.

The changes will recognise the time each parent spends caring for a child.
For example, a non-residential parent who looks after the children for at
least 14 per cent of nights each year is likely to pay less child support in
recognition of the costs involved.