21 June 2001 Media Statement

Liable parents payments to increase

Legislation increasing the minimum rate of child support to be paid by liable parents was given its first reading in Parliament today, Social Services and Employment Minister Steve Maharey said today.

The Child Support Amendment Bill increases the minimum rate from $10 a week to $12.75 a week or $663 a year from 1 April 2002. The minimum rate has not been adjusted since it was set in October 1990. The increase reflects the actual and expected movement in the Consumer Price Index from March 1990 to March 2002. In the future the real value of the minimum payment will be automatically maintained. About 79,000 liable parents would be affected by this change.

Mr Maharey said the Bill reinforced the Government’s firm view that all parents had a responsibility to contribute to the financial and emotional support of their children.

"It is important that all parents to the best of their ability accept their responsibilities towards their children, and to recognise these rates have not increased for over a decade

"Child support payments are also an important in helping sole parents on a benefit make their transition to work. Before they start work, beneficiaries receive just their benefit and get no direct advantage from the child support payment. However once they go off the benefit, any child support paid is additional to other income.

“The Government accepts that it also has a part to play in supporting sole parents, and has increased funding for childcare services along with looking into how it can better provide assistance and support.

"Liable parents with higher incomes will be required to make a more appropriate contribution towards the cost of raising their children. From 1 April 2002, the maximum annual income level for assessment of child support will increase from twice to 2.5 times the yearly equivalent of the average ordinary-time weekly wage, at current rates from $67,569 to $84,461.

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“This change will affect around 3,200 liable parents. For example, a liable parent with an income of $85,000, living alone and liable for two children, will pay $78 more a week.

"Recently there has been concerns expressed about the increasing number of Domestic Purposes Benefit recipients who are not naming the liable parent. They have their DPB payment reduced by $22 per child a week if the liable parent in not named.

“There are a number of reasons why a liable parent will not be named. It is quite a complex and sensitive area. In some cases it is because women are afraid they may be subjected to violence if the father is identified.

“However women who do not name the liable parent are financially penalising themselves when they are both on and off a benefit. We are looking further into how women can be encouraged to name the father who should be accepting his financial responsibilities,” Steve Maharey said.

ENDS

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