Child Support Reforms - aligning income definitions
Over the next two years, the Australian Government will undertake a major reform of the Child Support Scheme in order to deliver a system that acts in the best interests of children. As part of the reforms the Government will broaden and align the Family Tax Benefit (FTB) and Child Support income definitions for foreign income and reportable fringe benefits and include certain non-taxable payments in the child support income definition.
This measure will ensure that children are not disadvantaged in the assessment of child support obligations. The Child Support Scheme has many points of interaction with FTB and the Government considers that the Child Support Scheme and FTB need to be more closely aligned. The current child support formula does not take account of all of the income of both parents.
The reforms of the Child Support Scheme are extensive and will be implemented in three stages over a two year period. Stage One, commencing in July 2006, includes a number of changes such as increasing the minimum payment. Stage Two, to be implemented in January 2007, includes the introduction of an independent administrative review of Child Support Agency decisions. The major formula changes will occur in Stage Three in July 2008.
This measure is ongoing and will be implemented on 1 July 2008 as part of Stage Three of the reforms to the Child Support Scheme.
Total Government Funding
A net saving of $151.0 million over four years.