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2004-2005-2006
THE PARLIAMENT OF THE COMMONWEALTH OF AUSTRALIA
HOUSE OF REPRESENTATIVES
CHILD SUPPORT LEGISLATION AMENDMENT
(REFORM OF THE CHILD SUPPORT SCHEME - INITIAL MEASURES)
BILL 2006
EXPLANATORY MEMORANDUM
(Circulated by the authority of the
Minister for Families, Community Services and Indigenous Affairs,
the Hon Mal Brough MP)
CHILD SUPPORT LEGISLATION AMENDMENT
(REFORM OF THE CHILD SUPPORT SCHEME - INITIAL MEASURES)
BILL 2006
OUTLINE
The present bill represents the first stage in the implementation of the
Government's reform of the Child Support Scheme, in response to the report
In the Best Interests of Children, which was produced by the Ministerial
Taskforce on Child Support. The phased response to implementing the
changes to child support will continue with further significant changes,
including a new child support formula, being introduced in later bills.
The initial legislative changes introduced by the present bill amend the child
support legislation by:
· increasing and indexing the minimum child support payment;
· reducing the cap on adjusted income for child support assessment
purposes;
· amending the provisions dealing with a parent's capacity to earn;
· increasing the limit on prescribed non-agency payments from 25 per
cent to 30 per cent; and
· clarifying the constitutional validity of the Child Support Scheme for
exnuptial children in Western Australia when the Scheme is amended
from time to time.
Financial impact statement
Financial impact Total resourcing
2005-06 $ -1.1 m
2006-07 $ -0.6 m
2007-08 $ -0.4 m
2008-09 $ -0.2 m
CHILD SUPPORT LEGISLATION AMENDMENT
(REFORM OF THE CHILD SUPPORT SCHEME - INITIAL MEASURES)
BILL 2006
NOTES ON CLAUSES
Clause 1 sets out how the Act is to be cited, that is, the Child Support
Legislation Amendment (Reform of the Child Support Scheme - Initial
Measures) Act 2006.
Clause 2 provides a table that sets out the commencement dates of the
various sections in, and Schedules to, the Act.
Clause 3 provides that each Act that is specified in a Schedule is amended or
repealed as set out in that Schedule.
Clause 4 addresses the extension of amended child support Acts to Western
Australia in relation to exnuptial children and is explained in detail along with
the Schedule 5 amendments.
This Explanatory Memorandum uses the following abbreviations:
· `Child Support Assessment Act' means the Child Support
(Assessment) Act 1989; and
· `Child Support Registration and Collection Act' means the Child
Support (Registration and Collection) Act 1988.
1
Schedule 1 - Minimum annual rate of child support
Summary
This Schedule increases the minimum annual payment of child support from
$260 to $320, and includes a formula to calculate the minimum payment
annually from 1 January 2007. The annual changes to the minimum annual
payment of child support will be linked to increases in the consumer price
index (CPI). The Schedule also amends a number of sections that refer to the
present rate of $260.
Background
Presently, the minimum annual payment of child support is $260, or
approximately $5 per week. Income support pensions and benefits are
adjusted on different bases, with some being linked to movements in average
wages, and others to movements in the CPI. However, the minimum annual
payment of child support has not been linked to any index since it was
introduced in 1999, with the consequence that inflation has eroded the value
of the amount paid. Therefore, the minimum annual payment of child support
is being increased, but only to a level that will remain affordable to parents on
very low incomes. The Schedule increases the minimum annual payment of
child support to a level that would have resulted if it had been linked to the
CPI since 1999, and links the minimum annual payment to CPI on an ongoing
basis. This means that the minimum annual payment of child support is now
calculated in a manner that is consistent with the increases in income support
pensions and benefits.
Explanation of the changes
Child Support Assessment Act
Item 1 inserts into section 5 a definition of `index number'. It provides that
`index number' has the meaning given in new subsection 66(4). This
definition is used in that new subsection for calculating the minimum annual
rate of child support.
Item 2 inserts into section 5 a definition of `minimum annual rate of child
support'. It provides that `minimum annual rate of child support' has the
meaning given in subsection 66(4).
Items 3, 4, 5 and 6 omit from several subsections in section 66 the existing
references to the previous $260 minimum payment, and substitute references
to the new minimum annual rate, which will be derived from new
subsections 66(4), (5) and (6). This change is made because the minimum
annual rate of child support will now change each calendar year, and apply to
all child support periods commencing within that calendar year.
2
Item 7 inserts at the end of section 66 new subsections 66(4), (5) and (6).
Subsection 66(4) provides that the meaning of `minimum annual rate of child
support' is worked out using the formula set out. $320 represents the amount
that would be paid if the present minimum amount of child support ($260) had
been indexed since it was introduced in 1999. Subsection 66(4) also sets out
the definition of `index number', which is used in the formula for calculating the
minimum annual rate of child support. This index number is the All Groups
Consumer Price Index number that is the weighted average of the 8 capital
cities published by the Australian Statistician in respect of that quarter. This is
the standard CPI figure frequently used in such applications.
The formula ensures that the minimum annual rate of child support will
increase in accordance with CPI increases. If the CPI does not increase, then
using the highest index number for a September quarter in a year preceding
the commencement of the child support period ensures that the minimum
annual rate of child support will stay the same as it was for the previous year.
That is, the minimum annual rate of child support will increase if there is a net
increase in CPI, but will not decrease. The formula uses the index number of
`the September quarter of a later year that ends before the child support
period commences'. This ensures that any child support period that
commences between October and December of any year (that is, after the
index number for the September quarter is released) will still use the minimum
annual rate of child support that was calculated on 1 January of that calendar
year. The same minimum amount of child support will be payable throughout
a child support period, regardless of whether a new calendar year
commences during that period.
Presently, child support assessments are calculated as an annual rate, which
is rounded to the nearest dollar in accordance with section 156 of the Child
Support Assessment Act. The periodic amount payable is then reduced to a
daily rate (that is, it is divided by 365.25), with rounding applied to five decimal
places. The amount payable each week, month or fortnight is then
determined by multiplying the daily rate by 7, 14 or 30.4375, and rounded to
the nearest cent. This process will continue under the new arrangements.
Item 7 also inserts new subsections 66(5) and (6). Subsection 66(5) provides
that the first index number for a quarter published by the Australian
Statistician is the number used in working out the minimum annual rate of
child support in accordance with subsection 66(4). If the Australian
Statistician publishes a later number for a quarter, that number is disregarded
for the purposes of subsection 66(4). Subsection 66(6), to which
subsection 66(5) is subject, provides that, if the Australian Statistician
changes the reference base for the CPI, then only the index numbers
published in terms of the new reference base are relevant for
subsection 66(4).
3
Item 8 omits from subsection 66A(2) the existing reference to the previous
$260 minimum payment and substitutes a reference to `the minimum annual
rate of child support in respect of that period'. This change is made because
the minimum annual rate will now change each calendar year, and apply to all
child support periods commencing within that calendar year.
Similarly, item 9 amends subsections 98A(4) and (5) by omitting the existing
references to `under an assessment to a rate below $260 per annum' and
substituting `in relation to a day in a child support period under an assessment
to a rate below the minimum annual rate of child support in respect of that
period'.
Item 10 amends section 155 by inserting a new paragraph (e), which requires
the Registrar to publish in the Gazette before the end of each calendar year
the minimum annual rate of child support. This means that the minimum
annual rate of child support can be determined by using the formula in
subsection 66(4), but is also readily obtainable in the Gazette. Other amounts
that are calculated each calendar year for the purpose of calculating a child
support assessment for a period commencing during that year are also
published in the Gazette.
Item 11 provides that the amendments in the Schedule apply to a day in a
child support period that is, or is after, commencement of these amendments.
In accordance with the commencement provisions in clause 2, this date is
likely to be 1 July 2006, but if not, will be the start of the day after the day on
which this Act receives the Royal Assent. This means that, from
commencement, all payers who pay the minimum amount of child support will
pay an increased amount, regardless of when they start a new child support
period.
4
Schedule 2 - Lower cap on child support
Summary
This Schedule amends the figure that sets the `cap' on a liable parent's
adjusted income for child support purposes, and aligns it with the figure that is
used to calculate the payee's disregarded income. That is, in determining the
maximum amount used as a liable parent's adjusted income for child support
assessment purposes, the `all employees average weekly total earnings'
(EAWE) figure will be used instead of the `full-time adult average weekly total
earnings' (AWE) figure. Because the EAWE figure is lower than the AWE
figure, these changes effectively lower the maximum amount of child support
payable by liable parents with high incomes.
Background
The basic purpose of the cap is to limit the possibility of child support being
paid by higher income earners at a level that exceeds the actual costs of
caring for the child. However, the existing level of the cap has been seen as
too high and inequitable, partly because of the use of a higher statistical
income figure than is used for other purposes of the Child Support
Assessment Act, such as the disregarded income of a payee. The changes to
section 42 mean that a liable parent's maximum adjusted income will be
based on the same statistical measure as the one used in section 46 for a
payee's disregarded income. The income measure that will be used for
assessing a liable parent's income is a more realistic measure of income than
is currently used, and is consistent with the treatment of the payee's income.
Explanation of the changes
Part 1 - Main amendments
Child Support Assessment Act
Item 1 repeals the definition of `relevant AWE amount', and item 2 repeals the
definition of `yearly equivalent of the relevant AWE amount', in section 5.
These concepts will no longer be used in the Child Support Assessment Act.
Item 3 omits from section 42 the words `relevant AWE amount' (first
occurring), and substitutes the words `EAWE amount'.
Item 4 repeals in section 42 the formula for calculating the cap on a liable
parent's adjusted income amount. It substitutes a new formula, which
provides that the cap on a liable parent's adjusted income amount is
calculated by deducting the liable parent's exempted income amount from the
figure which is 2.5 times the yearly equivalent of the EAWE amount.
5
Items 5, 6 and 7 omit the words `relevant AWE amount' and substitute
`EAWE amount' in paragraph (b) of the definition of `maximum possible child
support liability' in subsection 52(2), in subsection 58(1), and in
subparagraphs 98S(1)(f)(i) and 118(1)(f)(ii).
Item 8 amends section 154 by omitting the reference to the full-time adult
average weekly total earnings.
Item 9 amends paragraph 155(a) by omitting the words `of the relevant AWE
amount, and'.
Part 2 - Amendments contingent on the Child Support Legislation
Amendment Act 2006
Division 1 - Amendments that might not commence
Child Support Assessment Act
Item 10 inserts into section 5 a definition of `yearly equivalent of the EAWE
amount'. This term means, in relation to a child support period, 52 times the
EAWE amount. This amendment will not commence if the Child Support
Legislation Amendment Bill 2004 (currently before the Parliament) is enacted
and commences as the Child Support Legislation Amendment Act 2006
before the present bill, because that bill already contains an amendment to
introduce this definition (see item 11 below). However, if the 2004 bill is
enacted and commences after the present bill, then item 10 will commence
as set out in the commencement provisions in clause 2 of this bill.
Child Support Legislation Amendment Act 2006
Item 11 repeals item 4 of Schedule 3, which inserts the definition of `yearly
equivalent of the EAWE amount', will not be required if the Child Support
Legislation Amendment Bill 2004 is enacted and commences as the Child
Support Legislation Amendment Act 2006 after the present bill. In that case,
item 10 of this Schedule will have inserted that definition. However, item 4
will not be repealed if the 2004 bill is enacted and commences before the
current bill.
Items 10 and 11 ensure that the definition of `yearly equivalent of the EAWE
amount' is only included once in the Child Support Assessment Act.
Division 2 - Amendment that commences after the Child Support
Legislation Amendment Act 2006 commences
Child Support Assessment Act
Item 12 omits from subsection 58C(2) the words `relevant AWE amount' and
substitutes `EAWE amount'. Item 12 ensures that the amendment introduced
by the Child Support Legislation Amendment Bill 2004 is consistent with the
changes in terminology introduced by the present bill.
6
Part 3 - Application
Item 13 provides that the amendments, apart from item 12, apply in relation
to a day in a child support period that is, or is after, the commencement of
Part 1 of this Schedule. In accordance with the commencement provisions in
clause 2, this date is likely to be 1 July 2006, but if not, will be the start of the
day after the day on which this Act receives the Royal Assent. This means
that the lower cap applies in relation to all child support liabilities on or after
commencement of Part 1 of this Schedule, regardless of when a new child
support period commences. The effect of changing the cap is that a high-
income earning parent will pay at the higher rate (that is, the cap based on 2.5
times AWE) until this Schedule commences, and will pay at the lower rate
(that is, 2.5 times EAWE) after that day.
The amendments in item 12 apply in relation to a day in a child support period
that is, or is after, the commencement of Part 1 of this Schedule, or the day on
which item 12 commences, whichever is later. That is, the application of item
12 depends on the date of commencement of the Child Support Legislation
Amendment Act 2006.
7
Schedule 3 - Earning capacity of a parent of a child
Summary
This Schedule sets out a new way of assessing a parent's capacity to earn.
In particular, the changes prescribe in greater detail than was previously
contained in the Child Support Assessment Act, how a parent's capacity to
earn is assessed.
Background
`Capacity to earn' decisions have been among the most controversial child
support decisions. A capacity to earn decision is one where the
decision-maker recognises that a parent's real income is as stated, but
considers that he or she has a capacity to earn that is greater than is being
exercised. Consequently, the parent's child support liability is assessed using
a notional income based on the parent's earning capacity. Where the liable
parent is assessed on his or her earning capacity, the amount payable by the
liable parent is increased. Where the payee parent is assessed on his or her
earning capacity, the amount payable by the liable parent decreases.
However, there have been problems in how a parent's capacity to earn has
been assessed. Many of these problems have arisen from the lack of a clear
statutory definition of `capacity to earn'. For example, the current method of
assessing a parent's capacity to earn permits a decision that requires a parent
to work extensive overtime, if that had been the parent's working pattern
before the relationship broke down. This Schedule introduces changes that
provide that assessment of a parent's maximum capacity to earn is based on
the level of normal full-time work for the occupation or industry in which he or
she is involved.
The new method of assessment is intended to be flexible enough to allow
parents whose earning capacity has been assessed for child support
purposes to make decisions about their work and life, for example, choosing
to pursue a different career or reducing work hours due to caring
responsibilities, in the same way as parents in intact families. However, it is
also important to take account of whether a parent, either payer or payee,
whose earning capacity is assessed for child support purposes, makes
changes to his or her work, where a major purpose of those changes was to
affect the assessment of his or her liability. Therefore, the Schedule
introduces provisions that allow a court to make an order that a parent has a
greater capacity to earn than he or she is presently exercising if the parent
has not demonstrated that affecting his or her assessment for child support
was not a major purpose of that decision. That is, the court may make an
order that a parent has a capacity to earn greater than he or she is presently
exercising if the parent cannot show that he or she had an appropriate reason
for his or her decision about work changes.
8
Explanation of the changes
Child Support Assessment Act
Item 1 omits from subparagraph 117(2)(c)(i) the words `either parent or'. This
is because the grounds for departure that are related to either parent's
income, property, financial resources and earning capacity will be dealt with in
a separate paragraph.
Item 2 introduces after subparagraph 117(2)(c)(i) new
subparagraph 117(2)(c)(ia), which sets out that the income, property and
financial resources of either parent may be a ground for departure in a court
order. Item 2 also introduces new subparagraph 117(2)(c)(ib), which sets out
that the earning capacity of either parent may be a ground for departure.
These new subparagraphs cover the matters that were omitted from
subparagraph 117(2)(c)(i) by item 1.
Item 3 is a minor amendment that corrects in subsection 117(3A) an incorrect
reference to `sub-paragraph 117(2)(b)(i)(C)'.
Item 4 omits from paragraph 117(4)(d) the words `earning capacity'. This is
because matters concerning a parent's earning capacity will be dealt with
separately.
Item 5 inserts after paragraph 117(4)(d) new paragraph 117(4)(da), which
deals with the earning capacity of each parent who is a party to the
proceedings. This new subparagraph covers the matters that were omitted
from paragraph 117(4)(d), and ensures that a parent's earning capacity is still
a matter to which a court must have regard in determining whether it would be
just and equitable to make a particular order.
Item 6 omits from subsection 117(7) the words `or a parent of a child'. Item 7
omits from paragraph 117(7)(a) the words `or parent' (wherever occurring).
This is because the income, earning capacity, property and financial
resources of each parent will be dealt with in separate subsections. These
changes mean that subsection 117(7) now applies only in relation to the child.
Item 8 inserts after subsection 117(7) a new subsection 117(7A). This
subsection 117(7A) deals with the same matters as are dealt with in
subsection 117(7), but with two important distinctions. Firstly,
subsection 117(7A) only applies in relation to a parent of a child, and not the
child. Secondly, subsection 117(7A) only deals with the income, property and
financial resources of a parent of a child. A parent's earning capacity is dealt
with separately (see subsection 117(7B) below).
9
Item 8 also introduces a new subsection 117(7B) along with new
subsection 117(7A). Subsection 117(7B) sets out the matters about which a
court must be satisfied before determining that the parent's earning capacity
is greater than is reflected in his or her income. These matters include, in
paragraph 117(7B)(a), that the parent does not work despite ample
opportunity to do so, or has reduced his or her hours below what are
considered normal full-time hours for the occupation or industry in which the
parent is employed, or has changed his or occupation, industry or working
pattern.
Paragraph 117(7B)(b) provides that the court must also be satisfied that the
parent's decision about one of the matters set out in paragraph 117(7B)(a) is
not justified on the basis of the parent's caring responsibilities or state of
health. `Caring responsibilities' may include responsibilities to persons other
than children in relation to whom child support is paid, such as parents or a
new partner in relation to whom no reasonable alternative caring
arrangements are available.
Paragraph 117(7B)(c) provides that the court must also be satisfied that the
parent has not demonstrated that affecting the administrative assessment of
child support was not a major purpose of his or her decision about work
changes. Paragraph 117(7B)(c) is a rebuttable presumption but the onus to
rebut the presumption is on the parent. That is, the parent must demonstrate
that there are good reasons why he or she has changed his or her working
behaviour. For example, a parent working in a low-skill manufacturing
position may decide that there are better long-term employment prospects if
he or she undertakes retraining to enable him or her to work in information
technology. This may result in lower, or no, earnings for a period of time, but
he or she would not be subject to a capacity to earn decision because the
decision about changing work was made for a reason other than affecting the
child support assessment.
Subsection 117(7B) limits the ability of the court to make an order on the
grounds of a parent's earning capacity. If the ground on which the court
would have made the order is that the parent's earning capacity is not
reflected in their income, then the court will not be able to find that the `just
and equitable ground' has been met unless subsection 117(7B) has been
met. An assessment of earning capacity cannot be a reason for making an
order unless subsection 117(7B) is satisfied.
Item 9 amends subsection 124(3) by providing that the court must have
regards to the matters set out in new subsection 117(7A) in deciding whether
it would be just and equitable to make a particular order. As the matters set
out in new subsection 117(7A) were previously included in subsection 117(7),
this is simply a consequential change.
10
Item 10 amends section 124 by introducing a new subsection 124(3A). This
subsection 124(3A) deals with a parent's earning capacity when a court is
considering whether making orders for provision of child support otherwise
than in the form of periodic payments would be just and equitable. The court
must be satisfied as to the matters set out in section 117(7B) in order to make
a determination that the parent's earning capacity is greater than is reflected
in his or her income. As this subsection 124(3A) refers to subsection 117(7B),
the description of subsection 117(7B) in item 8 above also applies in relation
to subsection 124(3A).
Item 11 amends subsection 124(5) by inserting after `(3)' a reference to `(3A)'.
The effect of this is that the court is not limited in the matters it may consider
in making a court order.
Item 12 amends subsection 125(5) by providing that the court must have
regard to the matters set out in new subsection 117(7A) in deciding whether it
would be just and equitable to make a particular order. As the matters set out
in new subsection 117(7A) were previously included in subsection 117(7), this
is simply a consequential change.
Item 13 amends section 125 by introducing a new subsection 125(5A).
Subsection 125(5A) deals with how a court must consider a parent's earning
capacity when stating whether child support ordered under section 124 is to
be credited against the parent's liability under an administrative assessment.
The court must be satisfied of the matters set out in section 117(7B) in order
to make a determination that the parent's earning capacity is greater than is
reflected in his or her income. As subsection 125(5A) refers to
subsection 117(7B), the description of subsection 117(7B) in item 8 above
also applies in relation to subsection 125(5A).
Item 14 amends subsection 125(7) by inserting after `(5)' a reference to `(5A)'.
The effect of this is that the court is not limited in the matters it may have
regard to when stating, in an order under section 124, whether the child
support ordered to be paid in the order is to be credited against the liable
parent's liability under any administrative assessment.
Item 15 amends subsection 129(5) by providing that the court must have
regard to the matters set out in new subsection 117(7A) in deciding whether it
would be just and equitable to make a particular order. As the matters set out
in new subsection 117(7A) were previously included in subsection 117(7), this
is simply a consequential change.
Item 16 amends section 129 by introducing a new subsection 129(5A).
Subsection 129(5A) deals with how a court must consider a parent's earning
capacity when modifying orders made under section 124. The court must be
satisfied of the matters set out in section 117(7B) in order to make a
determination that the parent's earning capacity is greater than is reflected in
his or her income. As subsection 129(5A) refers to subsection 117(7B), the
description of subsection 117(7B) item 8 above also applies in relation to
subsection 129(5A).
11
Item 17 amends subsection 129(7) by inserting after `(5)' a reference to `(5A)'.
The effect of this is that the court is not limited in the matters it may have
regard to when modifying orders made under section 124.
Item 18 sets out the application of the amendments in this Schedule. The
amendments in this Schedule apply on the day on which this Schedule
commences. In accordance with the commencement provisions in clause 2,
this date is likely to be 1 July 2006, but if not, will be the start of the day after
the day on which this Act receives the Royal Assent. The amendments apply
to certain decisions or determinations made by the Registrar, and certain
court decisions made on or after commencement of the Schedule.
12
Schedule 4 - Prescribed non-agency payments
Summary
These changes increase to 30 per cent the maximum percentage of a payer's
child support liability that may be credited in relation to prescribed non-agency
payments.
Background
Section 71C of the Child Support Registration and Collection Act allows for
certain third party payments to be credited towards a payer's child support
liability. The types of payment, known as prescribed non-agency payments,
that may be credited are listed in regulation 5D of the Child Support
(Regulation and Collection) Regulations 1988 and include payments such as
child care costs, school fees and essential medical and dental bills, amongst
other things. Presently, credit may be given up to a maximum of 25 per cent
of the ongoing liability in any payment period, provided that the balance of
child support is paid as it becomes due and payable. The changes provide
that credit may be given up to a maximum of 30 per cent of the ongoing
liability in any payment period. The purpose of these changes is to give
payers of an enforceable maintenance liability greater determination over how
child maintenance money is spent.
Explanation of the changes
Child Support Registration and Collection Act
Item 1 omits from subsection 71C(1) references to `25%' wherever it occurs
and substitutes `30%'.
Item 2 provides that the change applies in relation to any uncredited amount
that arises on or after the day on which this Schedule commences, as well as
to amounts that arose before that day but that have not been fully credited. In
accordance with the commencement provisions, this date is likely to be 1 July
2006, but if not, will be the start of the day after the day on which this Act
receives the Royal Assent. Crediting will take place as is set out in the
following example:
Rob (a payer) pays school fees of $500 on 1 April 2006 and applies for
this to be credited on 2 April 2006. The application is accepted and the
$500 becomes an `uncredited amount'. His child support is $400 per
month. In the first three months, Rob pays $300 and $100 is credited
from his uncredited amount. On 1 July 2006, Rob has $200 that has not
been credited. Rob pays $280 on his first payment day in July, and $120
(that is, 30 per cent of his monthly liability) is credited from his uncredited
amount, leaving $80 uncredited. The remaining $80 will be credited
against his next monthly payment.
13
Schedule 5 - Exnuptial children and Western Australia
Summary
This Schedule addresses a constitutional issue with the application of the
Child Support Scheme to exnuptial children in Western Australia. More
specifically, the amendments confirm the validity of the longstanding practice
of administering two parallel schemes during periods that fall between
amendments being enacted to the Commonwealth legislation and Western
Australia adopting those amendments for its exnuptial children.
Background
The Commonwealth child support legislation relies on the marriage and
territories powers in the Constitution. Those heads of power do not cover
exnuptial children. All states have referred their power to make laws about
exnuptial children to the Commonwealth except Western Australia, which has
chosen instead to adopt the child support legislation from time to time through
a series of Acts. However, the Western Australian adoption Acts have lagged
behind the Commonwealth amendments, sometimes by considerable periods.
For example, Commonwealth amendments from 1995, 1997 and 1998 were
not adopted by Western Australia until 2000. More recently, the July 2001
Commonwealth amendments were adopted by Western Australia in
December 2002.
The Child Support Agency has operated on the basis that, until Western
Australia adopts any set of Commonwealth amendments, the law operating in
Western Australia for exnuptial children is the child support legislation that
existed before the Commonwealth amendments. This means two child
support schemes operate during these hiatus periods - a pre-amendment
scheme applying to exnuptial children in Western Australia and a
post-amendment scheme applying the up-to-date legislation to all other
children in Australia, including children of marriage in Western Australia.
Legal advice on the constitutional validity of using this approach during the
hiatus periods has confirmed that the legal risks are low. Specifically, it is
unlikely that a court may find there is in fact no child support legislation
operating in Western Australia for exnuptial children during the hiatus periods.
However, amendments have been advised to put the matter beyond doubt.
In broad terms, the amendments involve:
· including provisions in all future Acts amending the child support
legislation, to ensure the continued operation of the pre-amendment
legislation in Western Australia for exnuptial children, together with a
special amendment to make similar provision for all past amending
Acts (a short-term solution not requiring the cooperation of the Western
Australian Parliament), and
14
· a once-only amendment to the child support legislation to guarantee
the valid operation in Western Australia for ex-nuptial children of the
pre-amendment legislation, until Western Australia adopts further
Commonwealth amendments (a long-term solution requiring the
cooperation of the Western Australian Parliament in adopting the
amendments).
The Western Australian Government has agreed to cooperate with the
amendments involved in the long-term solution. However, because it cannot
be predicted accurately when the Western Australian Parliament will adopt
those amendments, both solutions are pursued in this bill so that the
short-term solution can address the issue for past hiatus periods, as well as
for future hiatus periods for as long as it takes for the long-term solution to fall
into place through an adopting Act.
It is clearly desirable to put these matters beyond doubt in the face of the
extensive child support reform provided by this current bill and forthcoming
bills, as announced by the Government.
These amendments commence on Royal Assent.
Explanation of the changes
Clause 4 - Extension of amended Child Support Acts to Western
Australia in relation to exnuptial children
This clause is the first iteration of the standard provision, described above in
relation to the short-term solution to this issue, that will be included in future
Acts amending the child support legislation. It ensures the continued
operation in Western Australia for exnuptial children of the child support
legislation that has been in force before this bill commences. This continued
operation will apply until the Western Australian Parliament adopts the
amendments made by this bill, from which point the child support legislation
as amended by this bill will extend to Western Australia for exnuptial children.
Although there is no reason to believe the Western Australian Government
will change its longstanding adoption approach to these matters, the clause
specifically recognises the constitutional alternative of referral of power, as the
other states have done. Thus, the rule that extends the post-amendment
legislation is expressed to apply from the point at which Western Australia
either adopts the amendments or refers its power. Similarly, the rule that
extends the pre-amendment legislation in the meantime is expressed to apply
until either of those events occurs.
A note to the clause makes the consequence of the new rule clear. That is,
two separate schemes are intended to operate during the hiatus periods -
one for exnuptial children in Western Australia and one for all other children in
Australia, including children of marriage in Western Australia.
15
It will no longer be necessary to include a clause such as this one in
amending Acts once the long-term solution provided by Parts 1 and 2 of this
Schedule have been adopted by Western Australia.
Schedule 5 - Exnuptial children and Western Australia
Part 1 - Amendment of Child Support (Assessment) Act 1989
This Part provides the Child Support Assessment Act amendments involved in
the long-term solution discussed above. Part 2 provides the equivalent Child
Support Registration and Collection Act amendments.
The long-term solution involves amending the existing provisions in the two
primary child support Acts that extend and apply the Acts, and the Western
Australian Parliament adopting these amended provisions. The amendments
will make clear the intention that, whenever the Acts are amended in future,
the pre-amendment legislation will extend to Western Australia for exnuptial
children until the Western Australian Parliament adopts the amendments,
from which point the child support legislation as amended will extend to
Western Australia for exnuptial children.
This long-term solution, once concluded with adoption, will eliminate the need
to include a provision such as clause 4, which addresses the short-term
solution, in each Act amending the child support legislation.
The drafting for the long-term solution is very similar to that for the clause 4
short-term solution, including the specific reflection of a possible referral of
power as an alternative to adoption of amendments, and a note making clear
the intention for there to be two parallel schemes during the hiatus periods.
In making the Child Support Assessment Act amendments, it is being made
clear in section 13 that it addresses the extension of the Act in relation to
exnuptial children only. Section 14 continues to apply the Act in relation to
children of marriage. However, subsection 14(1) is not being similarly
amended to refer only to children of marriage. This is because section 14 is
drafted as a reading down provision, whereas section 13 is an
application/extension provision. Therefore, the current broad reference in
subsection 14(1) to the maintenance of children must remain as it is so that
subsection 14(2) will apply correctly to read down the effect of the section to
children of marriage only.
Item 8 provides the substantive amendments for this Part. It adds new
subsections 13(5A) and (5B) to achieve the effect described above.
Items 2 and 7 make minor consequential amendments to reflect the insertion
of new subsections 13(5A) and (5B).
Items 1 (including note 1), 3, 4 and 6 make minor amendments to clarify that
section 13 relates only to exnuptial children.
16
Subsection 13(2), as substituted by item 2, and the amendment made to
subparagraph 13(4)(a)(ii) by item 5, remove an existing phrase (`, or are
included in,'), which is superfluous and confusing now that section 13 has
been clarified as relating only to exnuptial children.
Note 2 to item 1, and the notes to items 3 and 4, insert headings to some
existing subsections in section 13, to help with readability of the now longer
section.
Part 2 - Amendment of Child Support (Registration and Collection)
Act 1988
This Part provides the Child Support Registration and Collection Act
amendments involved in the long-term solution discussed above. Part 1
provides the equivalent amendments to the Child Support Assessment Act.
The effect of the amendments is the same as explained above for the Child
Support Assessment Act. In this case, section 5 is the provision being
amended, including being clarified as addressing the extension of the Act in
relation to exnuptial children only. Section 6 continues to apply the Act in
relation to children of marriage and is not being amended for the same
reasons as given above for section 14 of the Child Support Assessment Act.
Item 17 provides the substantive amendments for this Part. It adds new
subsections 5(5A) and (5B) to achieve the effect described above.
Items 11 and 16 make minor consequential amendments to reflect the
insertion of new subsections 5(5A) and (5B).
Items 9 (including note 1), 12, 13 and 15 make minor amendments to clarify
that section 5 relates only to exnuptial children.
Subsection 5(2), as substituted by item 11, and the amendment made to
subparagraph 5(4)(a)(ii) by item 14, remove a phrase (`, or are included in,'),
which is superfluous and confusing now that section 5 has been clarified as
relating only to exnuptial children.
Note 2 to item 9 and the notes to items 12 and 13 insert headings to some
existing subsections in section 5, to help with readability of the now longer
section.
17
There are two minor additional amendments in this Part that do not have
equivalents in Part 2. The first is item 10, which amends subsection 5(1) to
reflect the fact that Queensland referred its power in this matter to the
Commonwealth some time ago and should therefore be explicitly covered by
the same rule as the other named states that have referred their power, as is
the case in the (later drafted) Child Support Assessment Act. The second
additional amendment is the note to item 17, which brings the heading to
section 6 into line with that for the equivalent section 14 of the Child Support
Assessment Act - that is, `Additional application of Act in relation to
maintenance of children of marriages'.
Part 3 - Extension of amended Child Support Acts to Western Australia
in relation to exnuptial children
This Part provides the element of the short-term solution discussed above that
confirms the past intention that, whenever either child support Act was
amended by any of the 39 amending Acts listed, the pre-amendment
legislation applied in Western Australia for exnuptial children until the Western
Australian Parliament adopted the amendments. From that point, the child
support legislation as amended applied in Western Australia for exnuptial
children.
Additionally, this intention is confirmed for past amendments made by any of
the listed amending Acts that are yet to be adopted by Western Australia - in
reality, this will mean the more recent amending Acts on the list. To achieve
this broad coverage, the provision is drafted in a combination of past and
future tenses.
Again, the drafting of this element is very similar to the clause 4 drafting,
including a note making clear the intention for there to have been, or to be,
two parallel schemes during the hiatus periods. However, this time there is no
need to reflect specifically the possibility of a referral of power as an
alternative to adoption of amendments because we know in fact that that did
not occur before the last of the listed amending Acts was enacted.
Item 19 is the main substantive provision for this Part, to achieve the aim set
out above.
Item 20 is a special provision to confirm the validity of the appropriations
underpinning payments made during the hiatus periods. Payments and
repayments of amounts under the Child Support Registration and Collection
Act are, and have been, made through mechanisms referred to in section 75.
Currently, the mechanism is the Child Support Account, which is a Special
Account for the purposes of the Financial Management and Accountability
Act 1997, and therefore is appropriated under section 21 of that Act.
18
To make sure that past payments made were valid, item 20 effectively makes
them debts, creates a new, equal entitlement, provides for the necessary
appropriation, and allows the debt and entitlement to be offset against each
other. There is no net effect on clients from this approach. Certain other
technicalities are addressed to make sure that several provisions to do with
payments and overpayments do not impede this validation exercise.
Similarly, item 21 makes sure that any rights and liabilities of a person that
may have been affected by any weakness in the arrangements historically
applied during the hiatus periods are valid rights and liabilities as intended at
the time.
Item 18 sets up a definition of `Child Support Act' for the purposes of this Part,
to provide a shorthand reference to either the Child Support Assessment Act
or the Child Support Registration and Collection Act.
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