Shared Parenting - Overview of Family Law Reforms

• June 2006

‘Shared Parenting’ is the term that is being used to describe the largest, and most important reforms to Family Law in 30 years. In what has been described as a holistic approach, the Government will roll out major changes to the Child Support System and Family Law Legislation from 1 July 2006.

The Child Support Scheme, unchanged since 1988, will be updated to reflect the substantial change in Australian Society. Payments will be calculated on the actual cost of children and will place a greater emphasis on both parents remaining actively involved in their children’s lives after separation.

The Family Law (Shared Parental Responsibility) Amendment Bill, passed by the Senate on 30 March 2006, will attempt to change the culture surrounding family separation. The legislation recognises the equal role of parents in making decisions about the major long-term issues involving their children and will require the Court to consider whether it is practicable for a child to spend equal time with parents.


REFORMING THE CHILD SUPPORT SCHEME

The biggest overhaul to Australia’s system of child support will affect around 1.2 million parents.

The Reforms, based on the Ministerial Taskforce on Child Support, will include a new formula that is expected to reduce conflict between parents and ensure child support is paid in full and on time. Unfortunately, the significant and extensive legislative changes will be introduced in three stages over a two-year period, and the formula is not expected to take effect until July 2008. Key changes and their expected enactment dates have been outlined.

Changes to Minimum & Maximum Payments

Minimum payments will be indexed to the Consumer Price Index which will ensure the minimum child support payments keep in pace with inflation. From July 1 2006 the current $5 minimum payment will be increased to just over $6 per week.

Conversely the maximum amount of child support payable by high-income earners will be reduced. Research on the costs of children underlined that non-resident parents on high incomes pay Child Support in excess of the costs of their children. Therefore from 1 July 2006 the amount of income above which no additional child support is payable, will be reduced from $139,347 to $104,702.

Rewarding Non-Resident Parents

In an attempt to encourage and reward non-resident parents on welfare to spend more time with their children, non-resident parents will have the opportunity to earn an extra $16.50 per week. Originally the ‘with child’ rate was only awarded to parents who cared for their children at least 30 per cent of the time. Now the provision has been extended to all parents who spend at least one night per week with their child.

Additionally, from 1 July 2006, non-resident parents will be able to spend a greater percentage of their payments directly on their children. Non-resident parents will be able to forward up to 30%, (a 5% increase) of their payments to essential items such as school fees, and medical costs.

Independent Review of CSA Decisions

Presently parents are only able to seek an independent review of Child Support Agency Decisions through the court system. This proves to be timely and expensive.

The role of the Social Security Appeals Tribunal will be expanded and parents who are unhappy with decisions can request a review by the Tribunal. This is expected to increase transparency in the system and should come into effect from 1 January 2007.

The New Formula

The major change to the Child Support Scheme will be the introduction of a new formula. Expected to affect the payment levels of almost every one of the 726,000 families using the system, the new formula:

  • Is based on the costs of children
  • Considers the combined income of both parents and treats the incomes of both parents in the same way
  • Recognises both parents contributions to the children via care or contact; and
  • Treats children of first and second families equally

Details of the exact formula have yet to be released however it has been announced that any income a resident parent earns over $16,883 will reduce child support payments. This is a huge reduction as the present rate is $41,881 and experts predict that non-resident parents who spend at least one day a week with their children will have their child support payments cut by 24%.


Compliance

Overall the Child Support Agency (“CSA”) will be implementing new compliance initiatives. Currently about 50% of payments are made in full and on time. CSA will refer 100,000 parents who failed to lodge their tax return to the ATO each year compared with the current rate of 24,000. In addition to this the CSA is expected to increase the number of investigations and court procedures against parents who are suspected of understating their incomes. Minister for Family and Community Services, Mal Brough stated that they expect these new compliance regimes to generate payments of $484 million to parents.

What Does This Mean For Parents?

Changes will be implemented from 1 July 2006 and whilst single mothers groups are up in arms, it is expected that 40-45% of separated Dads will end up paying more under the system that recognises the higher costs of children.

FAMILY LAW (SHARED PARENTAL RESPONSIBILITY) AMENDMENT BILL

In an attempt to reduce litigation and promote a ‘culture of cooperation’ the Family Law Amendment Bill (“The Bill”) introduces the presumption of Shared Parental Responsibility.

Subject to a court order, both parents have always had an equal role in making decisions regarding major long-term issues involving their children. These issues, such as where the child will live, what sport the child should play, which school the child should attend etc, are apportioned to parents upon separation. The parental responsibility issues will remain the same - what will change is the decision making process of the Family Court.

The proposed legislation will shift the starting point of the Court. Instead of starting on zero and allocating parental responsibility according to the best interests of the child, the Bill proposes a starting point of 50/50.

This presumption can then be challenged if it would not be in the best interests of the child, or where there has been abuse or family violence.

Will This Mean A Presumption of Shared Care?

If (and only if) the Court comes to the conclusion that it is in the child’s best interests for the parents to have equal parental responsibility, it will go on to consider whether spending equal time with each parent would be in the child’s best interests, and would be reasonably practicable.

If it is not appropriate the Court must then consider whether a child should still spend “substantial and significant time” with each parent, again based on whether it is reasonable practicable and in the child’s best interests.

Will I Be Able To Change Existing Parenting Orders?

Amendments will only apply to parenting orders made after the commencement of the Shared Parenting Bill. The new provisions will not apply to people who already have parenting orders. To change current parenting orders, the court must be satisfied that there has been a significant change in circumstances to warrant the orders being granted.

CONTACT GRECH PARTNERS

We understand that family law matters can often be extremely complicated and emotionally draining. We also appreciate that what works for one person, just won't do for another. That is why we ensure that all our advice is tailored to each individual or couple we see. And that is why we also ensure that you receive clear and realistic options that address your concerns and needs. If you require our expertise in this area, please do not hesitate to contact Grech Partners Solicitors on (02) 9851 2500.


This publication contains general information only. It is not provided as legal advice. Professional advice should be taken before any course of action is pursued, or any information herein relied upon.