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Results of Stage Three Changes to the Child Support Scheme

Results of Stage Three Changes to the Child Support Scheme

This report outlines the population-level impact of changes to the Child Support Scheme that took effect on 1 July 2008, based on the combined outcome of the child support and Family Tax Benefit (FTB) changes. Financial outcomes of the child support changes cannot be viewed in isolation from FTB. This is partly because changes in the amount of child support received may alter the amount of FTB payable, and partly because the reforms to the child support system included important changes to FTB eligibility rules.

The results presented are based on actual new child support assessments effective as of 1 July 2008, and modelling of the FTB that would be payable on the basis of these assessments.

This means that the results presented here show what the financial outcome would be for parents if the new child support liability was paid in full. They do not show what the actual financial outcomes might be, because many parents do not pay or receive their child support in full or on time. So, some parents who appear to be receiving less or paying more may only be experiencing a reduction in an entitlement that they have never regularly received, or paying a liability they have never regularly paid. Moreover, the FTB that parents receive in a financial year is reconciled to the child support they actually receive, not the amount they should receive according to their child support assessment.

A key objective of the child support reforms is to improve compliance with child support obligations. This includes not only ensuring that parents pay their full assessment on time, but also that the assessment is an accurate reflection of a parent's capacity to pay. With this in mind, the Child Support Reforms package included $165 million in additional resources for enforcement activities which, to date, has yielded $104 million in extra child support since the measures began in July 2006.

Report on the population impact of the new child support formula (2008 Stage 3 measures)

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