Child Support Scheme

In the Best Interests of Children - Reforming the Child Support Scheme - Report of the Ministerial Taskforce on Child Support

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Letter of transmittal 

Ministerial Taskforce on Child Support

The Hon Senator Kay Patterson
Minister for Family and Community Services
Parliament House
Canberra ACT 2600

Dear Minister

I am please to be able to present to you the Report of the Ministerial Taskforce on Child Support.

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In the Best Interests of Children - Reforming the Child Support Scheme Summary Report

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Summary Report and Recommendations of the Ministerial Taskforce on Child Support

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Fact sheet Nineteen: Alignment of income definitions for child support and Family Tax Benefit (FTB)

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From 1 July 2008, the income definitions for child support and Family Tax Benefit (FTB) are more closely aligned.

To calculate child support, the previous Child Support Scheme used a parent's taxable income with net rental property losses and exempt foreign income added back in, plus the gross value of reportable fringe benefits. This was similar to the income definition for FTB, except that the FTB income definition included many tax free pensions and benefits and used the net value of reportable fringe benefits. The treatment of foreign income was also different.

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Fact sheet Eighteen: Child support agreements and lump sum payments

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When relationships break down parents need to work out a range of issues, in particular, child support arrangements. The best arrangements are those that parents negotiate between themselves. These arrangements are more likely to last because parents feel responsible for the choices they have made.

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Fact sheet Seventeen: Changes to Family Tax Benefit (FTB)

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Sharing Family Tax Benefit (FTB)

Before 1 July 2008, parents could share Family Tax Benefit (FTB) if each parent provided care of their children at least 10 per cent of the time. This meant that small changes to care arrangements had financial implications for parents. The independent Ministerial Taskforce that reviewed child support considered that it is in the best interest of children that care arrangements are not affected by financial concerns as much as possible.

Regular care

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Fact sheet Sixteen: Simpler child support processes when parents get back together

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From 1 July 2008, the new Child Support Scheme makes it easier for parents who want to get back together.

Prior to 1 July 2008, if parents reconciled, the receiving parent had to ask the Child Support Agency (CSA) to end their child support assessment. If the couple separated again, the receiving parent had to apply for a new assessment.

New approach

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Fact sheet Fifhteen: Extra income earned after separation

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After separation, parents may have extra costs to re-establish themselves. This applies to both resident and non-resident parents. Depending on the circumstances, one or both of the parents may need to find a new house to live in, or buy furniture, a car or other items to support the children during care. As a result of these extra costs, a parent may take on overtime or a second job.

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Fact sheet Fourteen: Second families - new arrangements

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From 1 July 2008, the new Child Support Scheme treats the children of first, second and subsequent families more equally.

Tensions regularly arise when separated parents have re-partnered and have a new family with their new partner. Paying parents feel the conflicting pressures of having to support children in two families and, depending on parents' incomes, the children in each family may receive significantly different amounts of support.
 

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Fact sheet Thirteen: Fixed assessments

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One of the principles of the Child Support Scheme is that a parent's financial contribution to their children should be based on their total income. The Child Support Agency (CSA) uses taxable income as the basis of child support assessments. This means that parents who minimise their taxable income pay unrealistically low levels of child support.

Previously, the CSA substituted an income that better represented a parent's capacity to pay through the change of assessment process. However, this was a slow and resource intensive process.

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Fact sheet Twelve: Minimum payments

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The Child Support Scheme is intended to reflect broad community values - and one of those values is that both parents should contribute to the cost of raising their children. In its review of the Scheme, an independent Ministerial Taskforce on child support found that there was community support for non-resident parents on low incomes paying some child support - like all other non-resident parents.

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