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:
- support parents by giving them more time (13 weeks compared to 28 days) to work out their parenting arrangements before they need to apply for a child support assessment which, in turn, may affect their family payments;
- limit the reduction of Family Tax Benefit (FTB) Part A under the Maintenance Income Test to only those children in a family for whom child support is paid; and
- provide more flexible arrangements for child support agreements and lump sum child support.
The Child Support Scheme has many points of interaction with FTB. The Maintenance Income Test and Maintenance Action Test for FTB will be amended to better support the child support reforms.
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, July 2008.
The changes to FTB will occur in Stage 2 (extending the period of time for parenting arrangements to be finalised) and Stage 3 (Maintenance Income Test and lump sum arrangement changes).
Total Government Funding
The Government will provide $45.4 million over four years.