Family Matters No. 29 - August 1991

Paying for the children

Evaluating Australia's Child Support Scheme
Margaret Harrison

Abstract

The author presents some of the findings of the Institute's evaluation of Stage One of the Child Support Scheme, which has been written up in the report 'Paying for the children: parent and employer experience of Stage One of Australia's Child Support Scheme' (1991). She concentrates on the reports by parents registered with the Child Support Agency at the time of the evaluation.

The Institute has completed its evaluation of the Child Support Scheme, the findings of which are presented in the recently published book, Paying for the Children. Margaret Harrison, AIFS Fellow, reports.

The Institute completed its evaluation of Stage One of the Child Support Scheme in February of this year, and the final report, Paying for the Children: Parent and Employer Experience of Stage One of Australia's Child Support Scheme, was launched in early June in Parliament House, Canberra, by the Minister for Social Security, Senator Graham Richardson.

This book is the sequel to Who Pays for the Children?: A First Look at the Operation of Australia's New Child Support Scheme, published by the Institute in 1990.

Paying for the Children concentrates on the experiences and attitudes of approximately 14,000 parents registered with the Child Support Agency, and of employers directly involved in the automatic withholding procedures. It includes the responses of many of the pre-Scheme parents who participated during the first phase of the evaluation in 1988.

This article concentrates on the reports by parents registered with the Agency at the time of the evaluation. As custodial parents were almost invariably women and non- custodial parents almost invariably men, the terms 'mother' and 'father' are used interchangeably throughout.

In the years that spanned the first and second phases of the study, the climate of child support in this country changed radically, at least for one group of parents. Stage One of the Scheme, which came into operation in June 1988, collects money already due under a court order or court-approved agreement, and transfers it to the custodial parent through the Child Support Agency. Stage Two was introduced in October 1989, with its main feature the automatic assessment of amounts payable by way of an administrative formula (see Family Matters No.25, December 1989, pp.38--39). All respondents to the evaluation were excluded from entry into Stage Two, as their separation or their child's birth had preceded the 1 October 1989 cut-off date.

The Institute's evaluation points to the small impact of the Stage One collection and enforcement procedures on the parents for whom it was intended. Less than 10 per cent of the eligible parent population had registered with the Agency at the end of December 1990 under Stage One, two- and-a-half years after its introduction. This is largely attributable to the small numbers who have 'registrable liabilities' (orders or court- approved agreements for the payment of child support), and to the apparent reluctance of those without such liabilities to obtain them. Nonetheless, it is estimated that only about one-quarter of those with court-enforceable child support have registered these for collection via the Child Support Agency.

Evaluation of Stage One and its Impact on Stage Two

Although the Institute's evaluation was not intended to look at the operation of the formula, the findings have strong implications for its more widespread application. For example, comparison of Stage One support entitlements arising out of court orders in 1990 with Stage Two assessments made (according to the formula) during the same period showed the former to be, on average, $8.50 per week per child lower than the latter. As Stage Two assessments are reviewed annually and court orders are not, the discrepancy would be expected to become greater over time. The report concluded that insufficient attention has been paid in the past to the impact of inflation on amounts ordered or agreed to, and that placing the onus on custodians to initiate a variation put additional pressure on them.

Another observation is that registration with the Agency does not guarantee prompt payment. Just more than half (55 per cent) of the registered mothers in the survey reported receiving support payments following their entry into the Scheme. The Agency's own figures show that 55 per cent of registered custodians receive payments within the statutory pay cycle, with the compliance figure increasing to more than 70 per cent with time.

As for the extent of child support provided before coming into the Scheme, only 35 per cent of mothers had been paid by the other parent before registration, a figure virtually identical to that of pre-Scheme custodians in Who Pays for the Children? (34 per cent of whom were child support recipients). Looked at somewhat differently, 37 per cent of mothers who were receiving payments via the Agency in early 1990 had not received anything before coming into the Scheme. In the light of the findings discussed in the earlier report, it can be safely assumed that many whose child support was paid by their child's other parent would have received payments erratically, which the Agency's collection and enforcement mechanisms would be expected to correct.

The data collected during the major phase of the evaluation also showed that many Stage One mothers were aware of the main features of the Stage Two procedures and resented their exclusion from them. Administrative assessment was seen as providing greater financial contributions and more realistic and accessible reviews of amounts payable than were provided by the collection and enforcement measures of Stage One. Comments such as these were made by a group of mothers in the study:

'I believe it unfair that all maintenance collected through the Child Support Scheme is not carried out the same way. I think all payments made should be worked out the same way - that is, a percentage of non-custodial parent's income.'

'I am one of those unfortunates who separated before a particular date. Why are my children discriminated against? And why do I have to keep paying costly court costs out of my meagre savings to try and get an update for them?'

The report found that neither custodial nor non-custodial parents have any desire to have orders varied by way of court proceedings. Mothers frequently commented on the financial and/or psychological cost of going to court to have amounts increased. One described the legal system as being 'very costly' and 'not just', and said it was also 'very traumatic and frustrating'. Another said she found it very difficult to get maintenance increased without having a lawyer and 'even then it depends on what lawyer you use, and they are very costly so you tend to back off for an increase, so partner does have it very easy, especially when he can afford a lawyer and I can't because keeping two children is costly'.

The reluctance of fathers to use the courts could be inferred from the fact that, although a group of them were unemployed and obviously unable to meet their commitments, many had taken no action to have orders varied. In view of their generally poor understanding of the Scheme, there was some suggestion that these men may have been unaware of their right to a variation, or may have assumed that the Agency would be able to vary or cancel their obligations on becoming aware of their circumstances. In fact, the Agency's collection and enforcement powers are limited to the terms of the order or court-approved agreement that is the subject of the registration.

Differing Accounts

One obvious area of concern in this, as in other areas of marriage breakdown, is the discrepancy in the accounts of custodial and non-custodial parents. Non-custodial parents were generally negative about the operation of the Scheme, an unsurprising finding given its nature and intention. They also had a limited understanding of the collection procedures. For example, more than one third (38 per cent) of fathers reported what they considered to be an adequate understanding of how the Scheme operated at the time of their registration. This had increased to 65 per cent at the time of the evaluation, but was still disappointingly low.

When asked what their main concerns were about being in the Scheme, about half the fathers (51 per cent) said they had insufficient income to meet their child support liabilities. This was seen to be a realistic concern for many. The evaluation showed that the main difference between payers and non-payers was their employment status at the time of the survey. Thirty per cent of non-custodial parents were unemployed, and 85 per cent of unemployed parents were paying no child support. As mentioned earlier, these parents were not without remedies, but had not relied on them, either through ignorance or choice. However, consistent with the views of custodial parents, non- custodians obviously have no wish to become involved in court proceedings.

Perhaps the most worrying polarisation between custodial and non- custodial parents occurs in their perceptions of the relationship between fathers and their children, and the effect of Child Support Agency registration on this relationship.

Both fathers and mothers reported a low incidence of post-separation access visits. Fifty-five per cent of fathers and 48 per cent of mothers said the children and the non- custodial parent were seeing each other, but the only measure of frequency was whether visits were overnight or not.

Non-custodians were more likely than custodians (31 per cent compared with 19 per cent) to report that their relationship with their children had changed since they had come into the Scheme. They were more likely to attribute this to registration, and to consider that the change was for the worse.

While 18 per cent of custodians reported that they were apprehensive about registration increasing tension around access, another 21 per cent said they were apprehensive about some violence occurring at that time. Fortunately, their anticipated fears did not appear to have been realised in most cases.

A small proportion (26 per cent) of the registered non- custodial parents who responded indicated that they were happy with their access and custody arrangements at the time of the survey. Thirty per cent said they wanted the children to live with them, and 42 per cent wanted to see the children more frequently. These data give some indication of the sense of loss, distress and sometimes anger experienced by non-custodial fathers, and these are doubtless related to the low levels of access referred to earlier. The evaluation paints a fairly depressing picture of fragmented parenting after separation, and strengthens calls to examine existing laws and practices in the hope that ongoing cooperative parenting may be more readily achieved (see the article 'Changing Families: Changing Laws' elsewhere in this issue).

As was found in the Institute's earlier book, Who Pays for the Children?, there was an association between the payment of support and contact between the children and their fathers, although the data were insufficiently strong to enable the direction of the association to be identified. Mothers who were receiving payments were more likely to report that the children were seeing the other parent than were non-recipients (53 per cent compared with 30 per cent), and less likely to say that there was no contact (36 per cent compared with 61 per cent). Only 43 per cent of fathers who were not seeing their children indicated that they were paying child support after registration. Several fathers explained a reduction in their visits to their children as being linked to having insufficient money to travel long distances, or to their having to work overtime to pay the child support. For example, one said:

'In order to pay extra, my work commitments take up most of my free time.'

Others related their involuntary loss of contact with their children to their non-payment or anger at having to pay.

'I don't know how the child is, neither do I know how the child looks.'

'Their mother has moved away. I don't know to where - the Child Support Agency will not pass on information. When I pay direct, I know where we all are.'

Custodial parents paint a different picture. Although few reported any change in the non-custodial parent--child relationship, the most common comment from those who saw a change was a reduction or termination of visits after registration, whether or not they were receiving child support at the time of the survey. Those for whom no money was being paid tended to relate this to the father's reluctance to be traced by the Child Support Agency.

'Because he won't pay me he avoids myself, the children and the Agency. He has not seen his children in over two years.'

'He won't or hasn't been in touch apart from one birthday card with no return address since the Agency traced him.'

Those who were receiving child support and made reference to a reduction in visits from the other parent frequently attributed these to the father's resentment at being 'caught' by the Scheme.

'My ex-husband never paid for approximately five years and as I registered with the Agency, he refused to see the children and stopped making contact.'

'As he had not paid for three months, I put him into the Child Support Agency. He was furious and threatened me. As he did not have to come with the maintenance, his visits got fewer and fewer until he stopped coming altogether.'

This last point - the connection between actual visits and payment - was cited by a number of fathers who complained that they had been excluded from their children's lives by the automatic and inflexible nature of collection under Stage One. While custodial parents spoke positively about the Agency being a buffer between them and the other parent, this was cause for resentment by fathers.

'By removing my right to pay directly, it has enabled my former wife to carry out her campaign of alienation between me and my children.'

'Because now maintenance payment is automatic, my ex- wife allows me access as she sees fit.'

The point was made slightly differently by a smaller group of fathers who were concerned that their children were unaware of the financial contributions they were making for them.

'My children see myself as unsupporting - I appear not to contribute. This attitude has, with the help of their mother, made me look hard to them and their response to myself is bitter.'

'As soon as maintenance was put through the Child Support Agency, my ex-wife moved 400 kilometres away, thus making access more difficult. My children have been unaware that I pay for anything in their lives.'

The other side of the coin was shown by mothers who, despite registering with the Agency, were not receiving any money at the time of the evaluation. They tended to comment on the effect the non-payment had on their children.

'They think less of their father for not paying and not helping them with food, clothes, school needs etc.'

'The children are aware that their father is avoiding maintenance, and that the lack of money creates a hardship on all of us.'

Those whose child support was being paid sometimes accused the other parent of complaining about the amounts paid or involving the children in their financial grievances.

'He reminds them constantly of how much they cost him each week.'

'He has become even meaner with the children - won't buy them anything or take them on a decent outing, harps at them that I have all the money and he is poor and criticises their clothing, saying I don't spend the money on them.'

However, in contrast to the fathers, some mothers were positive about the effect of registration on the parental-- child relationship, claiming that the involvement of the Agency had removed the payment issue as a source of disagreement between the parents.

'There is less tension over money. He never wanted to pay me anything, so decided to go for custody. Since the Child Support Agency is like a go- between, he has calmed down.'

'It has helped having someone else chasing him for maintenance because he does not hassle me about it, which always caused tension for our child.'

Conclusion

Obviously, although the legal obligations to support one's children after separation are unambiguous, the issues that surround payment are complex and difficult. Australia's adoption of a Child Support Scheme that operates in two distinct stages has changed the framework of private responsibility for children after separation. It will, in time, affect the arrangements of all parents who do not live together, but, under current arrangements, it will be 15 years before all assessments and collections are made in the same way.

The Child Support Evaluation Advisory Group in its August 1990 report, The Child Support Scheme, Adequacy of Child Support and Coverage of the Sole Parent Pensioner Population, recommended that the eligibility provisions of Stage Two be widened to allow all children to be the subject of administrative assessment, with the grounds of objection including unfairness because of the existence of prior financial arrangements.

On the basis of its separate research findings, the Institute made a similar recommendation, while stressing the need for fair appeal provisions and adequate staffing of the Agency to cope with larger volumes of work. In the interest of administrative efficiency and greater speed in transferring money from one parent to the other, it also recommended that the Scheme be administered by one organisation and that, in these circumstances, the Child Support Agency was the most appropriate. At present, the Agency and the Department of Social Security share the administration of the Child Support Scheme.

The main factors affecting the Institute's conclusions and recommendations were the data that showed that courts were contemporaneously awarding smaller amounts than were being assessed administratively, the rejection by custodial and non-custodial parents of courts as the forum by which variations of amounts might be obtained, the effect over time of inflation on unvaried orders, and the resentment of many custodial parents at being excluded from Stage Two.

It is clear that the main issue for child support in Australia is the speed at which the more comprehensive reforms associated with Stage Two of the Child Support Scheme might be introduced. Initial concerns that any suggestion of retrospectivity would be strongly opposed by non-custodial parents have been replaced by a sense that it is anomalous for children to be deprived of adequate support on the basis of their birthdate or the date of their parent's separation. This has been reinforced by data from the Institute's evaluation which suggest that it is rare for child support orders or agreements to be influenced by the nature of a property settlement; hence the courts should not be overwhelmed with appeals on the basis of 'double dipping' by custodians. It is now common for non-custodial parents to start second families. lathers who have new children will have this taken into account by the formula, which allows higher amounts of formula-free income in such circumstances.

In launching Paying for the Children, Senator Graham Richardson referred specifically to the Institute's recommendation that administrative assessment procedures be extended to those not presently eligible for it, and indicated that the Government would take steps to implement such a proposal.

Paying for the Children: Parent and Employer Experience of Stage One of Australia's Child Support Scheme, by Margaret Harrison, Gregg Snider, Rosangela Merlo and Viviana Lucchesi, AIFS Monograph No.10.