House of Representatives

Child Support Legislation Amendment Bill 1998

Explanatory Memorandum

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

General outline and financial impact

Child support adjusted formula income amounts

This Bill amends the Child Support (Assessment) Act 1989 to modify the child support administrative formula by:

increasing the paying parent's exempted income amount by 10%
including an allowance for a shared care child in the exempted income amount
lowering the payee's disregarded income amount, halving the effect where the payee's income exceeds that amount, and removing the automatic inclusion for formal child care costs.

Date of effect: On the day on which the Act receives Royal Assent and will not apply in relation to the part of the 1998-99 child support year that occurs before the 1998-99 commencing date.

Proposal announced: Joint Media Release of the Minister for Social Security and the Assistant Treasurer dated 30 September 1997.

Financial impact: Costs of $10.449 million in 1998-99 rising to $12.351 million in 2001-02 being primarily made up of Family Payment outlays.

Compliance cost impact: Nil

Information disclosure on assessment notice

This Bill amends the Child Support (Assessment) Act 1989 to limit the disclosure of information relating to children of a parent on the notice of assessment.

Date of effect: On the day on which the Act receives Royal Assent.

Proposal announced: Joint Media Release of the Minister for Social Security and the Assistant Treasurer dated 30 September 1997.

Financial impact: Nil

Compliance cost impact: Nil

Minimum liability ($260)

This Bill amends the:

Child Support (Assessment) Act 1989 to provide for a $260 minimum annual rate of child support
Child Support (Registration and Collection) Act1988 to allow the Registrar to request deductions to be made from social security pensions and benefits and applied towards child support liabilities
Social Security Act 1991 to require deductions to be made from social security pensions and benefits where requested by the Child Support Registrar.

Date of effect: On the day on which the Act receives Royal Assent and will not apply in relation to the part of the 1998-99 child support year that occurs before the 1998-99 commencing date. The amendments to the Child Support (Registration and Collection) Act1988 and the Social Security Act 1991 will commence on a day to be fixed by Proclamation, not more than 12 months after the day on which the Act receives Royal Assent.

Proposal announced: Joint Media Release of the Minister for Social Security and the Assistant Treasurer dated 30 September 1997.

Financial impact: Estimatedadministrative costs of $2.914 million in 1998-99 and $2.620 million in 1999-00 in order to make deductions from social security pensions and benefits .

Compliance cost impact: Nil

Private collection between parties

The Bill amends the Child Support (Registration and Collection) Act 1988 to encourage parents to take greater responsibility for their child support arrangements.

Date of effect: On a day to be fixed by Proclamation, not more than 12 months after the day on which the Act receives Royal Assent.

Proposal announced: Joint Media Release of the Minister for Social Security and the Assistant Treasurer dated 30 September 1997.

Financial impact: Estimated program running cost savings to the year 2001-02 totalling $42.06 million. (If 75% of cases need to have collection by the Registrar resumed, then savings would be $19.901 million. If 25% of cases need to have collection by the Registrar resumed, then savings would be $63.099 million.)

Compliance cost impact: Nil

Effect of care arrangements on assessment

This Bill amends the Child Support (Assessment) Act 1989 to enable administrative assessments to:

include a step-child as a relevant dependent child where the paying parent has a legal duty to maintain a step-child
reflect parents' agreement about care arrangements for their children
reflect both the factual and lawful daily care of a child.

Date of effect: On the day on which the Act receives Royal Assent and will not apply in relation to the part of the 1998-99 child support year that occurs before the 1998-99 commencing date.

Proposal announced: Joint Media Release of the Minister for Social Security and the Assistant Treasurer dated 30 September 1997.

Financial impact: Nil

Compliance cost impact: Nil

Starting date of liability

This Bill amends the Child Support (Assessment) Act 1989 to provide that the starting date of liability for an administrative assessment of child support is the date the application is made to the Registrar.

Date of effect: On the day on which the Act receives Royal Assent and will not apply in relation to applications for administrative assessment made before the prescribed day.

Proposal announced: Joint Media Release of the Minister for Social Security and the Assistant Treasurer dated 30 September 1997.

Financial impact: Nil

Compliance cost impact: Nil

Election by carer to end liability

This Bill amends the Child Support (Assessment) Act 1989 to allow a person in receipt of the more than minimum rate of Family Allowance to elect to end their administrative assessment where approval based on risk assessment has been granted by the Secretary to the Department of Social Security.

Date of effect: On a day to be fixed by Proclamation, not more than 12 months after the day on which the Act receives Royal Assent.

Proposal announced: Joint Media Release of the Minister for Social Security and the Assistant Treasurer dated 30 September 1997.

Financial impact: Recurrent program and running costs are being met. 1997-98 costs are $2.261 million. 1998-99 costs are 2.439 million.

Compliance cost impact: Nil

Extension of child support for secondary students

This Bill amends the Child Support (Assessment) Act 1989 and the Child Support (Registration and Collection) Act 1988 to enable a child support assessment to continue to the end of the school year in which a full-time secondary student turns 18.

Date of effect: On the day on which the Act receives Royal Assent and will not apply in relation to the part of the 1998-99 child support year that occurs before the 1998-99 commencing date. The amendments to the Child Support (Registration and Collection) Act 1988 will commence on a day to be fixed by Proclamation not more than 12 months after the day on which the Act receives Royal Assent.

Proposal announced: Joint Media Release of the Minister for Social Security and the Assistant Treasurer dated 30 September 1997.

Financial impact: Nil

Compliance cost impact: Nil

Notification requirements

This Bill amends the Child Support (Assessment) Act 1989 and the Child Support (Registration and Collection) Act 1988 to modify the:

date of effect of information provided to or obtained by the Registrar
manner in which information is provided to the Registrar.

Date of effect: : On the day on which the Act receives Royal Assent and will not apply in relation to the part of the 1998-99 child support year that occurs before the 1998-99 commencing date. The amendments to the Child Support (Registration and Collection) Act 1988 will commence on a day to be fixed by Proclamation not more than 12 months after the day on which the Act receives Royal Assent.

Proposal announced: Joint Media Release of the Minister for Social Security and the Assistant Treasurer dated 30 September 1997.

Financial impact: Nil

Compliance cost impact: Nil

Payments temporarily held in Child Support Reserve

This Bill amends the Child Support (Registration and Collection) Act 1988 to allow the Registrar to hold in Reserve money collected where a paying parent has lodged an application to the Family Court seeking a declaration that they are not a person from whom child support may be sought.

Date of effect: On a day to be fixed by Proclamation, not more than 12 months after the day on which the Act receives Royal Assent.

Proposal announced: Joint Media Release of the Minister for Social Security and the Assistant Treasurer dated 30 September 1997.

Financial impact: Nil

Compliance cost impact: Nil

Debts offset between parents

This Bill amends the Child Support (Registration and Collection) Act 1988 to allow for debts between two persons who owe child support in respect of their children to be offset.

Date of effect: On a day to be fixed by Proclamation, not more than 12 months after the day on which the Act receives Royal Assent.

Proposal announced: Joint Media Release of the Minister for Social Security and the Assistant Treasurer dated 30 September 1997.

Financial impact: Nil

Compliance cost impact: Nil

Credit for certain non agency payments

This Bill amends the Child Support (Registration and Collection) Act 1988 to modify the way in which non agency payments may be credited against a child support liability.

Date of effect: Part 1 of Schedule 12 will commence on a day to be Proclaimed, not more than 12 months after the date of Royal Assent. Part 2 of Schedule 12 will commence on 1 July 1999.

Proposal announced: 1998-99 Budget, 12 May 1998

Financial impact: Nil

Compliance cost impact: Nil

Objections to decisions of the Child Support Registrar

This Bill amends the Child Support (Assessment) Act 1989 to give clients the right to lodge objections to decisions made by the Registrar.

Date of effect: Immediately after the commencement of the "Departure from Administrative Assessment" amendments in Schedule 13 and will not apply in relation to the part of the 1998-99 child support year that occurs before the 1998-99 commencing date.

Proposal announced: Joint Media Release of the Minister for Social Security and the Assistant Treasurer dated 30 September 1997.

Financial impact: Nil

Compliance impact : Nil

Departure from administrative assessment

This Bill amends the Child Support (Assessment) Act 1989 to improve the process for departure from administrative assessment of child support.

Date of effect: Immediately after the commencement of the "Child Support Adjusted Formula Income Amounts" amendments 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.

Proposal announced: Joint Media Release of the Minister for Social Security and the Assistant Treasurer dated 30 September 1997.

Financial impact: Nil.

Compliance cost impact: Nil

Adjustment of child support income base

This Bill amends the Child Support (Assessment) Act 1989 to modify the income on which a child support liability is raised to include rental property losses and exempt foreign income.

Date of effect: Immediately after the commencement of "Objections to Decisions of the Child Support Registrar" amendments in Schedule 13 and and will not apply in relation to the 1998-99 child support year or any earlier child support year.

Proposal announced: Joint Media Release of the Minister for Social Security and the Assistant Treasurer dated 30 September 1997.

Financial impact: Estimated savings of $3.215 million commencing in 1999-00 will be generated from the proposal representing increased clawback from Social Security outlays.

Compliance cost impact: Nil

Assessment on most recent taxable income

This Bill amends the Child Support (Assessment) Act 1989 to enable a child support assessment to be calculated using the taxable income for the financial year immediately preceding the assessment.

Date of effect: Immediately after the commencement of "Adjustment of Child Support Income Base" amendments in Schedule 15 and will not apply in relation to the 1998-99 child support year or any earlier child support year.

Proposal announced: Joint Media Release of the Minister for Social Security and the Assistant Treasurer dated 30 September 1997.

Financial impact: Nil

Compliance cost impact: Nil

Flexible due dates for child support

This Bill amends the Child Support (Registration and Collection) Act 1988 to enable payers to elect to pay their child support in accordance with a nominated period rather than having to pay a monthly amount on the 7th of each month.

Date of effect: On a day to be fixed by Proclamation, not more than 12 months after the day on which the Act receives Royal Assent.

Proposal announced: Joint Media Release of the Minister for Social Security and the Assistant Treasurer dated 30 September 1997.

Financial impact: Nil

Compliance cost impact: Nil

Estimate Requirements

This Bill amends the Child Support (Assessment) Act 1989 to modify the current estimate election provisions by:

extending the latest date for lodgment of an income estimate to 31 July
allowing the Registrar to reject an estimate election.

Date of effect: Immediately after the commencement of the "Child Support Adjusted Formula Income Amounts" amendments 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.

Proposal announced: Joint Media Release of the Minister for Social Security and the Assistant Treasurer dated 30 September 1997.

Financial impact: Nil

Compliance cost impact: Nil.

Parent applications

This Bill amends the Child Support (Assessment) Act 1989 to allow a person to apply for an administrative assessment to pay child support.

Date of effect: On the day on which the Act receives Royal Assent and will not apply in relation to applications for administrative assessment made before the prescribed day.

Proposal announced: Joint Media Release of the Minister for Social Security and the Assistant Treasurer dated 30 September 1997.

Financial impact: Nil

Compliance cost impact: Nil

Family Allowance income credit for person paying child maintenance

This Bill amends the Social Security Act 1991 so that 50% of any child support paid by a paying parent will be deducted from the income which is used to calculate their entitlement to Family Allowance.

Date of effect: On a day to be fixed by Proclamation, not more than 12 months after the day on which the Act receives Royal Assent.

Proposal announced: Joint Media Release of the Minister for Social Security and the Assistant Treasurer dated 30 September 1997.

Financial impact: Cost of $10.264 million in 1998-99 rising to $10.826 million in 2001-02 being primarily made up of Family Allowance outlays.

Compliance cost impact: Nil

Miscellaneous technical corrections

This Bill will amend the Child Support (Assessment) Act 1989 to correct errors and out of date references.

Date of effect: On the day on which the Act receives Royal Assent.

Proposal announced: Not announced

Financial impact: Nil

Compliance cost impact: Nil


Copyright notice

© Australian Taxation Office for the Commonwealth of Australia

You are free to copy, adapt, modify, transmit and distribute material on this website as you wish (but not in any way that suggests the ATO or the Commonwealth endorses you or any of your services or products).