EXPEDITED CHILD SUPPORT

An Overview of the Commonwealth Countries'
and United States' Procedures for
Establishing and Modifying Child Support

Part 1
The Administrative Child Support Schemes of the Commonwealth Countries (continued)

AUSTRALIA

A. History of the Existing Scheme

The child support scheme currently operating in Australia dates back to 1988. The original goal of the system was to ensure that children receive proper support from parents capable of paying. Prior to 1988, the Family Law Act 1975 provided family judges and magistrates with the exclusive authority to make support orders in court. The orders were theoretically enforceable through the courts but were rarely acted upon; it was estimated that approximately two thirds of parents failed to pay the support they owed. The court processes were found to be overly lengthy and complicated and, thus, a disincentive for those persons seeking to have support orders enforced. Further, there was a blatant lack of any "objectively determined benchmark for assessing the amount to be paid."[2]

During the time leading up to 1988, two major studies were conducted and the resulting reports were instrumental in triggering large-scale reform in the area of child support. First, in 1979, the Family Law Council recommended an independent bureau for child support enforcement. Margaret Harrison reports that the 1986 Cabinet Subcommittee Discussion Paper on Child Maintenance identified "the need to strike a balance between public and private forms of support to alleviate the poverty of sole-parent families and to achieve some constraint on government outlays on sole-parent payments."[3]

In 1988, the Child Support Consultative Group proposed administrative assessment of child support.[4] The goal of these first-stage recommendations was to improve payment and collection of child support. Three of the questions looked at by the government of the day were as follows:

  1. where should the payments be collected and by whom?

  2. should the child support scheme apply only to welfare recipients ("pensioners")?

  3. should the scheme continue to utilize the court-based judicial assessments of child support levels or, rather, should support assessment be handled administratively?

In response to the first question, the government decided the Tax Office would be responsible for collecting payments. Second, not only welfare but all cases could be managed through the system upon request so as not to create a disincentive for leaving welfare. Because the court system was already extremely overburdened, the government opted for an administrative process of assessment.[5]

An explanation for the needed changes is that "widespread concern within the community for the economic distress of the majority of sole parents and their children ... led to calls for more effective measures to ensure both that payments [were] actually made and that the level of maintenance [bore] some resemblance to the costs borne by the custodian ... amendments [would ensure] that the first call for this support of children [was] placed on the parties themselves."[6]

B. The Child Support Scheme
The Child Support (Registration and Collection) Act 1988

The first relevant legislative initiative in Australia occurred in 1988 with the enactment of the Child Support (Registration and Collection) Act.[7] The primary features of this legislation were as follows:

  1. the decision that the Commissioner of Taxation would also act as Child Support Registrar, and that this person would be responsible for administering the legislation and delegating powers to designated officers as appropriate;

  2. the creation of a Child Support Register, which would contain information about child maintenance liabilities, in particular those administered by the courts or through agreements registered with the courts;

  3. the power given to the Child Support Registrar to collect outstanding debts through automatic withholding of part of the liable parent's employment income if applicable;

  4. the power given to the Child Support Registrar to distribute payments to the custodial parent; and

  5. the provision for review of decisions.

In accordance with these legislative provisions, the Child Support Agency came into existence as a branch of the Taxation Office, responsible for registering and collecting child support debts. The Department of Social Security was involved in distributing the child support payments to custodial parents. The split between the two separate departments was premised on the idea that the Department of Social Security could most effectively deal with distributing payments, particularly to welfare recipients whose benefits would be directly affected by the receipt of child support payments. Moreover, the Taxation Office was seen to have the appropriate level of expertise for collecting money in an efficient manner.[8]

The Child Support (Assessment) Act 1989

The second noteworthy piece of legislation was the Child Support (Assessment) Act 1989, which specifically provided for the administrative assessment of child support. The key contents of this act are as follows:

  1. administrative assessment eligibility applies to all children born after October 1, 1989 or whose parents have separated after that date;

  2. application for assessment is to be made through the Child Support Registrar;

  3. the assessment is to be made in accordance with the prescribed formula;[9]

  4. child support agreements, entered into by the two parents on their own behalf, can be registered with the registrar for collection purposes;

  5. variation from the prescribed formula can be requested through application to the registrar and, if fairly complex, the case will be referred to the court for determination; and

  6. certain people have the right to appeal the decisions of the registrar on certain grounds - specifically
    1. a custodial parent can dispute a refusal to accept an application for assessment,

    2. a liable parent can dispute an acceptance of an application for assessment,

    3. either parent can dispute the amount of support assessed, or

    4. either parent can dispute either the acceptance or nonacceptance of a pre-existing consent agreement.
The Process

The result of the 1989 legislation was the creation of a distinction between Stage One and Stage Two child support cases. The former category includes parents who separated and whose children were born before October 1, 1989. For these cases, the Family Law Act 1975 continues to apply and parents must go to court to have the issue of child support settled or to arrive at a consent agreement with the other parent. However, once the issue of child support has been established, through either means, the parent(s) can then choose to register the support order with the agency for administrative follow-up in regard to collection, modification and enforcement.[10] Stage Two cases include parents with at least one child born after October 1, 1989, or those parents who separated after that date. In these circumstances, the Child Support Agency is responsible for both assessment and collection of support payments for both nuptial and ex-nuptial parents.[11] A consent agreement not registered with the agency is an exception to this general rule. In addition, the Family Law Act 1975 also continues to apply in more complicated circumstances including third parties requesting child support; non-custodial parents no longer resident in Australia; children requesting child support on their own behalf; requests for child support for children more than 18 years of age; and maintenance requests by stepparents.

In all other circumstances, however, the court is generally no longer involved in establishing child support for Stage Two cases. When there is a pending divorce, the judge will likely send the parents to court-annexed counselling or mediation services to discuss most of the issues surrounding the children and to discuss a workable "parenting plan"; however, child support is dealt with as an independent issue through the Child Support Agency and would be directed to that forum before the other outstanding issues would be resolved in the courtroom.

The Departure Scheme

In 1992, amendments to the Child Support (Assessment) Act 1989 incorporated into the Australian system the concept of "departure from administrative assessment of child support." Pursuant to these legislative provisions, either party can make written application to the registrar stating that special circumstances exist that support departing from the regular administrative assessment of child support. Currently, the average time before a departure order will be heard is approximately three months; however, the agency has plans to make the system more efficient through ensuring that measures are taken to support more complete information being considered at the outset of the process.

As in New Zealand, the registrar must be satisfied that it would be just and equitable and otherwise proper to depart from the formula[12] and, further, that at least one of the required grounds for departure exists. Those grounds, the same as those used by the court, are as follows:

  1. the special circumstances of the case significantly reduce the capacity of either parent to provide financial support to the child because of

    1. a duty to maintain another child or person,

    2. the special needs of another person being maintained, or

    3. the commitment necessary to support either oneself or another person to whom the parent owes a duty of support;

  2. the special circumstances of the case significantly affect the costs of maintaining the child

    1. because of the high costs of enabling a parent to have contact with the child or because of the special needs of the child, or

    2. because the child is being cared for or educated in a manner expected by the parents; or

  3. the special circumstances of the case would result in unjust and inequitable determination of the level of financial support from the liable parent, if the regular administrative assessment were applied.[13]
Varying a Child Support Order

Similar to the New Zealand system, the Australian system provides for a periodic reassessment of support, which is done on a yearly basis. Each year, the Child Support Agency looks at the taxable income of both the non-custodial and the custodial parent for the year before; the liability of the non-custodian will either increase or decrease in accordance with the newly calculated child support.

The only other way a person can apply to have a child support order varied is through the departure scheme discussed in the previous section of this report. There is no time limit for requesting a departure review. A person has the right to request a court appeal if dissatisfied with the outcome of the departure process.

As previously stated, the court no longer plays a part in establishing child support orders; however, it is possible that one of the parties might ask that the court look at varying an existing administrative order without first resorting to the departure scheme if there are other related issues contemporaneously being considered by the court. Conversely, for Stage One cases (i.e. a child support order existing prior to 1989), the court must vary the orders. The agency cannot do so.[14]

C. Evaluation of the Australian Scheme

There is some evidence that the Australian administrative system is more successfully getting child support payments to the custodial parent than the processes that existed before the system came into being. This statement is particularly apt in regard to those custodial parents who are relying on social assistance. Margaret Harrison of the Family Court of Australia reports:

The Department of Social Security has reported that in December 1992, 40 percent of the approximately 300,000 sole-parent pensioners [social assistance recipients] declared receipt of some child support, up from 26 percent in 1988. Savings of $108 million ... were obtained in that period from reduced [social assistance] payments to beneficiaries.[15]

Harrison further estimates that the vast majority of those persons using the administrative process are "sole-parent pensioners [of whom] 90 percent ... have no earned income."[16] This figure suggests that many people not receiving social assistance are choosing to make their own arrangements privately rather than resorting to the Child Support Agency.

Child Support Agency statistics also indicate a large increase in collection of child support since the administrative scheme came into being; however, there is some question about the reliability of the findings of the studies conducted by the agency.[17] When the administrative scheme was first set up, it was praised by some for the fact that the administrative support assessments were considerably higher than those determined through court orders. Now that the courts also make use of the agency formula to make assessments, the discrepancy is probably shrinking.[18]

The Australian scheme has been criticized on the basis that it is prospective, leaving intact all orders negotiated prior to 1989. Margaret Harrison observes:

The decision to make administrative assessment totally prospective has been criticized on the basis that it prejudices the financial welfare of children whose parents fall outside the requisite dates, combined with evidence that court-ordered or privately negotiated amounts are generally lower than those produced by the application of the formula.[19]

Harrison also identifies some other criticisms of the Australian scheme, which include alleged unfairness of the utilized percentages in relation to the actual cost of the children; failure to consider the children's ages; and failure to consider that, often, non-custodians are financially unable to "repartner or reparent once their child support obligations have been met."[20] In 1993, Parliament appointed the Joint Select Committee on Certain Family Law Issues to look at the operation and effectiveness of the child support scheme. The committee set out its criticisms in its 1994 report. In that report, the committee suggested the system was cumbersome, with potential for delay at each stage of the process.[21] A related criticism centres on the fact that two separate departments are involved in administering the program - on the one hand, the Department of Social Security and, on the other, the Tax Office - and, often, the line of communication between the two departments is less than adequate, resulting in further delay and an element of confusion. Further, some commentators suggest the Tax Office, which is accustomed to collecting money from people, does not have the expertise to deal with the emotional aspects of child support; in other words, paying child support is not strictly a financial issue. There are always many factors involved, including the breakdown of a relationship and a desire to see one's children.

The administrative scheme has been set up in such a way that computer-generated letters are sent out to the parties. Many parents (particularly non-custodial parents) complain that the letters are offensive because, as M. Kingshott observed, "their form (usually a bald demand for arrears, without careful explanation of the reasons for the parent's liability, and their rights) is totally inappropriate, given the sensitive nature of the type of debt collected and its entanglement with emotional issues of relationship breakdown and access to children."[22] The telephone system also used in the Australian scheme is no better in this regard. Fully automated, it does not provide people with the ability to make a quick phone call to request clarification about an aspect of the case.

D. Development of the Australian Scheme
General Administrative Reform

Having identified some of the shortcomings of the existing child support system, the Joint Select Committee on Certain Family Law Issues made some proposals for child support reform in its 1994 report. In regard to proposed child support reform, the committee's report contained 163 recommendations.[23] Among the recommendations were the following:

  1. expand the Child Support Registrar's powers to include the ability to decide whether or not a support order should be varied if circumstances have changed substantially;

  2. establish new review bodies to review the Child Support Registrar's decisions with further appeal to either the Administrative Appeals Tribunal or the courts - the committee's particular recommendations on this point include

    1. amending the child support legislation to establish an internal objection procedure for administrative decisions and for departure from the formula assessment (recommendation 76),

    2. amending the child support legislation to establish an external review office, the Child Support Appeals Office, to determine appeals by custodial parents or non-custodial parents (recommendation 77),

    3. requiring the Minister Responsible for the Child Support Agency to appoint the appeal officers of the Child Support Appeals Office (recommendation 78),

    4. requiring an appeal officer sitting alone to make the Child Support Appeals Office review decisions (recommendation 79),

    5. publishing all review decisions of the Child Support Agency and the Child Support Appeals Office (recommendation 80),

    6. amending relevant legislation to establish the Child Support Claims Tribunal within the Administrative Appeals Tribunal's registry (recommendation 81),

    7. amending relevant legislation to enable an application for a review of a Child Support Appeals Office decision to be made to the Administrative Appeals Tribunal and an appeal from the Child Support Appeals Office to be made to the Family Court of Australia for a point of law (recommendation 82), and

    8. forbidding the Administrative Appeals Tribunal to charge a filing fee (recommendation 83);

  3. introduce case officers with assigned responsibility and accountability to clients so as to avoid problems of staff anonymity and client confusion;

  4. introduce a reference number system so as to ensure a higher level of feedback to clients and follow-up as needed on the files;

  5. require staff to identify themselves to clients at all times unless there are identifiable safety concerns;

  6. avoid the use of computer-generated responses to clients as much as possible;

  7. review the registration process for court orders and court registered agreements because of an outstanding problem of court order applications rather than finalized orders being registered;

  8. require family law magistrates to use a practice direction from the Family Court of Australia containing precedents for court order wording;

  9. require the Child Support Registrar to automatically accept applications for child support;

  10. require the liable parent to notify the Child Support Registrar of appeals to court and require the registrar to hold payments collected from the parent in trust;

  11. require family court registrars to consider disputed parentage cases a priority;

  12. give the Child Support Registrar the power to vary child support agreements where an order is inequitable or if the circumstances of either party changed sufficiently to justify the variance; and

  13. implement changes both to the formula and to departure order criteria.[24]
Reform to Bring Together Child Support and Other Family Law Issues

In addition, the committee also suggested that there be an increased focus on the interrelatedness of child support and other family law legislation. In order to achieve this goal, the committee recommended that

  1. there be amendments passed to both the Family Law Act 1975 and the Child Support (Assessment) Act 1989 to ensure that any parenting plans including provisions about child support liability and child support agreements be capable of acceptance by the Child Support Registrar (recommendation 72);

  2. there be an amendment to the Family Law Act 1975 to allow a maintenance order to be amended by a written agreement of the parties registered in the court (recommendation 152);

  3. in capitalizing child support in a property order in order to make an allowance for child support liability, the court specify the effect the order might have on future child support liability (recommendation 153);

  4. if a court makes no allowance for future child support liability, that it be specified in the order that no allowance was made; and

  5. if a court has specified in a property order that there is an allowance for future child support liability, the Child Support Agency calculate on a pro rata basis the amount by which child support should be reduced accordingly.[25]

The joint committee's recommendations have not yet been acted upon. There has been a change of government since the 1994 report was commissioned; however, it is anticipated that the implementation will take place in 1997.


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