Explanatory Memorandum
(Circulated by the authority of the Treasurer,the Hon. John Dawkins M.P.)CHAPTER 2
THE CHILD SUPPORT ASSESSMENT ACT 1989
SUBSTANTIAL ACCESS TO A CHILD MODIFICATION OF THE CHILD SUPPORT FORMULA
Modifies the formula where a parent has substantial access to a child
THE CHILD SUPPORT (ASSESSMENT) ACT 1989 PRELIMINARY AND PART 5 - SUB DIVISIONS E AND G SUBSTANTIAL ACCESS TO A CHILD
Summary of proposed amendments
2.1 This amendment will establish the concepts of major and substantial access as factors to be taken into account in the child support formula. The effect will be to reduce the amount payable under the formula where one parent has access to a child for at least 30% but less than 40% of the nights in a child support year
2.2 The amendment proposes that such a person be deemed to have substantial access to the child for 35% of the nights and be entitled to a concession in the formula. That person will not however qualify for the higher self support exemption amount used in the formula. The other person is deemed to have major access to the child for 65% of the nights.
2.3 A person is not at present deemed to be sharing the care of a child equally with another person until they have the child for at least 40% of the nights. There is now recognition of the need to have a level of care below the threshold of shared care in the legislation.
2.4 Significant costs are incurred by a person who has substantial access. As a result, both the capacity to pay at the full rate is reduced and the need to pay at that rate, given the extent of access, is not necessary. There is to be a new set of percentages in the shared care formula for such cases.
Explanation of the proposed amendments
2.5 Persons who have major and substantial access will both be included in the definition of an eligible custodian [Clause 6(a)]. This means that each person may lodge an application for assessment against the other with only the difference in the 2 amounts being payable. If a person has a low income and therefore no liability to the other person, the child support percentage applied in the formula for the other parent is reduced and this will usually be where the benefit is obtained.
2.6 In the event that the person with major access has a large income and the other person a low income, the person with major access may in fact pay maintenance to the person who has substantial access.
2.7 To ensure there is a clear distinction in the law between the terms "shared on going care" and other types of care, "substantial access" and "major access" are now included as defined terms [Clauses 6(c) and 7].
2.8 A new modified table of child support percentages replaces the existing table in two places in the Act [Clauses 10(b), 11(a) and 11(b)]. A person who has substantial access to one child will be able to receive the benefit of an assessment based on 8% of the child support income amount of the person with major access in cash or offset against an assessment based on 14% of their child support income amount. If more than one child is involved multiples, as provided for in the new tables, will apply with a special rounding provision to arrive at the percentage amount in section 54 calculations [Clause 11(c)]. An example of this calculation is now inserted in the Act [Clause 11(d)].
2.9 In applying the new percentages in substantial access cases a provision is inserted to deny the person with substantial access the higher exempted income amount in the formula [Clause 10(a)].
2.10 The definition of "relevant dependent child" is amended to remove an apparent internal anomaly in the wording and to ensure a liable parent who has the major care and access qualifies for the higher income self support exemption amount [Clause 6(b)].
2.11 The amendments will apply to all assessments that commence on and after 1 July 1993.
Clauses involved in the amendment
Clause 2 proposes that these provisions in the Act will commence on 1 July 1993.
Clause 6(a) proposes that a person who has substantial access will be an eligible custodian.
Clause 6(b) removes an internal anomaly in the definition of "relevant dependent child" and ensures the major access parent is entitled to the higher self support exemption.
Clause 6(c) inserts "substantial access" and "major access"as defined terms.
Clause 7 actually defines major and substantial access and major access.
Clause 10(a) inserts a provision to deny a person with substantial access the higher self support income amount.
Clauses 10(b) and 11(a) and (b) insert the modified table of percentages in two places.
Clauses 11(c) and (d) insert a rounding facility and an example assessment calculation