Explanatory Memorandum
(Circulated by the authority of the Treasurer,the Hon John Dawkins MP)CHAPTER 7
THE CHILD SUPPORT ASSESSMENT ACT 1989
ELECTIONS TO END AN ASSESSMENT AND OVERLAPPING LIABILITIES.
Ensure pensioners cannot end an assessment by election and repeal the overlapping liability provisions.
THE CHILD SUPPORT (ASSESSMENT ) ACT 1989
PART 9 MISCELLANEOUS
ELECTION BY CUSTODIAN ENTITLED TO CHILD SUPPORT TO END ADMINISTRATIVE ASSESSMENT
OVERLAPPING LIABILITIES
7.1. This amendment will deny pensioners being able to elect to end the liability of a custodian to pay child support under section 151. It will also remove the requirement for the Registrar under section 152 to have to offset any amounts payable under an order of the court or an agreement against amounts that subsequently become payable for the same child for the same period under an administrative assessment.
7.2. A provision had to be provided in the Act to allow a person to administratively stop the requirement of a person to pay child support if that was their wish. It would be inappropriate to require any other sort of formal proceeding to end something that had in fact started by the lodgment of an application for administrative assessment of child support.
7.3. The reason is to allow a quick remedy when people reconcile.
7.4. The provision is however available to pensioners and for similar reasons set out in the background to the amendments in clauses 8 and 9 of this Bill, a pensioner can minimise the impact of the child support legislation and possibly the Department of Social Security maintenance guidelines by improperly using this section. This avenue needs to be stopped for these people.
7.5. In so doing it will not deny a pensioner an easy remedy to properly end the liability as the happening of a terminating event specified in section 12 of the Act will automatically ensure the liability is ended when there is a reconciliation. In fact it should only be the happening of these events which should allow a pensioner to have the liability ended. That, however, is not the case with non pensioners and the provision in section 151 needs to be retained for them.
7.6. The requirement set out in section 152 on how to treat overlapping liabilities is complex and the need is questionable. It arises in the situation where, at the same time, there is an order of the court to pay maintenance for a child and the same child is an eligible child under the Act. The occurrence is relatively rare and when it does it only serves to overcomplicate what the Registrar must do in considering both liabilities.
7.7. If the assessed amount is greater than the ordered amount the outcome is there are 2 separate registrations in the child support register when the overlapping requirements are implemented. One is for the court ordered amount and the other is the additional amount payable for the child under the assessment, In these cases it is always the assessed amount that is the amount payable.
7.8. If the ordered amount is greater than the assessed amount it is the ordered amount that continues to be payable. There is an inequity in this because child support payments are now based upon capacity to pay. It could be argued that the ordered amount should remain payable because of an artificial arrangement in place to minimise the custodians liability under the Act but this can easily be remedied. The administrative review process set out in clause 5 which inserts a new Part 6A in the Act will provide ready access to a review for custodians who by chance may be disadvantaged and after that there is always a court action possible to ensure maintenance is payable if the court so orders.
Explanation of the proposed amendment
7.9. A new subsection 151(4) will be added which has the effect of not allowing an election to be made under the section if the custodian entitled to child support is in receipt of an income tested pension, allowance or benefit [Clause 12].
7.10. The existing section 152 is repealed and replaced by a new section 152 the effect of which is to ensure all court orders in respect of maintenance of a child cease to have effect when child support is payable for the child under an administrative assessment [Clause 13].
7.11. The amendment will apply from the date the Royal Assent is given to the Child Support Legislation (Amendment) Bill 1992 [Clause 2].
Clauses involved in the proposed amendment
Clause 2: proposes that the Act proposed by the Bill will commence on the date it is given the Royal Assent.
Clause 12:amends section 151 by inserting a new subsection 151(4).
Clause 13:repeals the existing section 152 and inserts a new section 152 the effect of which is to cause orders and agreements for the payment of maintenance for a child to cease if the child is an eligible child under the Act and child support is payable under an assessment.