Part 1 of 4: The Creation of the Child Support Scheme in Australia- 1989
This article traces the history of child support in Australia and is the first in a series of four articles. This article focuses on the invention of the administrative determination of child support, and how it differs from the former, Court based approach to child maintenance. Later articles in the series look at the mechanisms for review and departure from an administrative assessment of child support under the legislative formula.
In the beginning – the move from child maintenance to child support
The Child Support Scheme started on 1 October 1989 with the commencement of the Child Support (Assessment) Act 1989 and the Child Support (Registration and Collection) Act 1989. These twin pieces of legislation would become known as the Assessment Act and the Registration and Collection Act, for short. The design of the scheme included the creation of the Child Support Agency (the “CSA”) to administer it. The CSA is now a division of Services Australia. The Family Court or the Local Courts were no longer the first port of call to determine the level of financial support paid by one parent to another parent towards the costs of raising children.
The revolutionary element of the Child Support Scheme was to calculate a parent’s obligation to pay periodic child support through the application of a formula set out in the Assessment Act. The process of a parent making an application for the assessment of child support to the CSA and the CSA processing the application in accordance with the two Acts became known as “ordinary administrative assessment” or “formula assessment.” The most basic version of the child support formula 35 years ago mainly looked at the respective taxable incomes of each parent and the number of children that they had (1, 2, 3 or 4 or more) and applied a particular percentage to adjusted income amounts depending on the number of children. Today the elements of the formula and its application are more complicated, reflecting the evolution of the scheme over many years. Primary elements of the formula currently look at the combined incomes of the parents, the ages of the children, the level of care that each parent has with the child or each child and whether either parent has other dependent children.
Ordinary administrative assessment was a great success from 1989, both from a public policy view and for parents that were responsible for the sole care or the greater care of their child or children. Logically, the responsibility for meeting the costs of raising children should sit with their parents rather than the taxpayer.
The previous Court based approach
Before the scheme existed, a parent had to file an application for child maintenance with the Court if they were not receiving an adequate contribution from the other parent towards the child’s expenses. The disadvantages of the Court based approach included the lengthy time to obtain a result from the Court, pattern bargaining between solicitors to reduce the amount of child maintenance paid, the costs of having to engage legal representation, the inconvenience and costs of having to return to Court for a variation of the amount of child maintenance and the challenges of enforcement. Non-payment of a child maintenance order required the affected party to return to Court to try and enforce the order, at their own cost in the first instance. That is a long list of disadvantages.
The Court based approach to setting child maintenance amounts was essentially an adversarial process, and for many divorcing couples it created division and tension when they were otherwise able to agree on arrangements for their children and for their property settlement. The writer recalls running a contested variation of child maintenance case in the mid-1990’s and it ran for 2 days before a Registrar. (The commencement of the Child Support Scheme was not retrospective. Existing child maintenance orders would carry on until a child turned 18, or upon the early discharge of the order). It is a fair generalisation to say that the Court based approach was only available to wealthy litigants that could afford to engage lawyers and use the publicly funded Courts having jurisdiction under the Family Law Act, 1975.
As a young lawyer in the early 1990’s, it was a simpler task to advise clients about the new Child Support formula than to consider child maintenance through an adversarial lens, the latter requiring a forensic analysis of every item of household expenditure and potentially a forensic analysis of income from all sources. The introduction of an objective benchmark, through the formula, worked well for the majority of families. Many clients saved lots of time (by avoiding Court and attendances upon lawyers) and they saved money too (by obtaining periodic child support for the children sooner than they may have done through Court, and by avoiding or minimising their legal fees.) From the beginning, it was possible under the Assessment Act for parties to enter into a written Child Support Agreement that defined the level of periodic child support to be paid, and any further non-periodic child support to be paid for a child or children. The formula was used as a guide in negotiations in relation to the amount of periodic child support to be provided in future, such negotiations typically occurring alongside settlement discussions to finalise the division of property, just as we do today.
Departure from the formula
Of course, a formula-based system must have a mechanism to deal with cases that have special circumstances so as to prevent unjust and inequitable results. From the start, the Assessment Act contained Division 4 of Part 7, titled “Orders for departure from administrative assessment in special circumstances (departure orders)” and “Court- Review of Certain Decisions”, respectively. That part of the legislation and the “review rights” of parties that have a child support assessment, are the subject of the next three articles in the series.
Authored by Paul A. Lewis, Special Counsel
Paul Lewis is an expert on child support matters. This article is not a substitute for legal advice and is intended to be informative reading only.
Ramsden Family Law practises exclusively in family law from its offices at Level 3, 1 Castlereagh Street, Sydney. Five of our senior solicitors, including our principal, Reece Ramsden are accredited by the NSW Law Society as Accredited Specialists in Family Law. Please phone us on 02 8123 1222 or email us on [email protected] if you need legal representation in relation to child support and any other family law matters.
Posted in: Latest News
September 03 2024
