House of Representatives

Explanatory Memorandum

(Circulated by authority of the Minister for Family and Community Services, Senator the Hon Jocelyn Newman)

Chapter 14 - Departure From Administrative Assessment

Overview

14.1 Schedule 14 of the Bill will amend the Child Support (Assessment) Act 1989 (the Assessment Act) to:

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provide for the Registrar to initiate a departure from assessment

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extend the provisions for the exchange of information between parents

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give the Registrar the power to either increase or decrease child support based on the information provided

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allow the Registrar to refuse to make a determination without requiring a hearing

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allow both parents to appear and be heard at a hearing even though they have not provided a formal response.

Summary of the amendments

Purpose of the amendments

14.2 The proposed amendments will ensure that both parties have the opportunity to be involved and participate in the departure process so that just and equitable decisions are made and are seen to be made. This will result in assessments which more accurately reflect parents' capacity to pay.

Date of effect

14.3 Immediately after the commencement of the "Child Support Adjusted Formula Income Amounts" in Schedule 1 and will not apply in relation to the part of the 1998-99 child support year that occurs before the 1998-99 commencing date.

14.4 Transitional provisions are required, as there may be matters pending before the Registrar.

Background to the legislation

14.5 The Joint Committee proposed Recommendation 147 to address some limitations of the process for parties seeking to depart from a formula assessment.

14.6 The departure process relies on parents being aware of the financial circumstances of the other parent. Therefore while the Registrar may obtain information unavailable to the other party that indicates the administrative assessment does not accurately reflect a parent's income, he is unable to act on this information.

14.7 Where an application is made the Registrar must provide a copy of the application and any accompanying documents to the other party. The other party has a right of reply and frequently does so in writing. Currently the law is silent as to whether the Registrar is required to provide copies of these documents to the person applying for departure.

14.8 The Registrar is currently limited to making a determination in accordance with the application. If for example, the application is for a decrease in child support payable, the Registrar cannot make a determination that increases the amount. This may be despite information before him indicating that the circumstances of both parties would not be accurately reflected in the assessment. In this case the Registrar is restricted to simply refusing the application for departure in the absence of a cross application for departure from the other party.

14.9 The Registrar may refuse to make a determination where:

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there are no grounds

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the matters are too complex

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a person's subsequent application contains no new matters indicating grounds for departure.

The existing provisions are unclear as to whether or not the Registrar must give an applicant an opportunity to appear and be heard prior to deciding to refuse to make a determination.

14.10 The existing provisions are unclear as to whether or not the Registrar may give the party a right to be heard despite no formal response being lodged by them.

Explanation of the amendments

14.11 The proposed amendments will partially satisfy Recommendation 147 of the Joint Committee. In order to better integrate the measures proposed by the Joint Committee into the departure provisions it will be necessary to revise the overall structure of Part 6A. [Item 2 - repeal Part 6A and insert new Part 6A; Item 1 - amend paragraph 76(3)(aa); Item 3 - amend subsection 115(b); Item 4 - amend subsection 132(1)]

14.12 The proposed amendment will allow the Registrar to initiate the making of a determination where satisfied special circumstances exist. [Item 2 - insert new Division 3 "Departures initiated by the Registrar" in new Part 6A]

14.13 The proposed amendment will provide that the Registrar forward a copy of any reply documents from the other party to the applicant for the departure. [Item 2 - insert new subsections 98G(3) and 98N(2) in new Part 6A]

14.14 The proposed amendment will allow the Registrar to make a determination either increasing or decreasing child support payable based on the information before him. [Item 2 - insert new subsection 98S(2) in new Part 6A]

14.15 The proposed amendments will allow the Registrar to refuse to make a determination without a hearing being required. [Item 2 - insert new subsections 98E(a), section 98F, subsection 98J(2) in new Part 6A]

14.16 The proposed amendment will ensure that both parties have the right to be heard. [Item 2 - insert new subsection 98G9(3) in new Part6A]

Transitional provisions

14.17 The new rules under Part 6A will be taken to apply to applications which have been made under Part 6A but not determined prior to the commencement of the new Part 6A. Special transitional rules will apply to the following:

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applications made prior to the commencement date of this Schedule

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matters in which the Registrar has previously refused to make a determination

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determinations made but not yet given effect by the Registrar.

[Item 5 - transitional provisions]