1.1.2 Historical perspective
Prior to the introduction of an administrative child support scheme, it was generally recognised that the system where child maintenance was dealt with by the courts was not working for the benefit of all separated parents and their children. For example:
- obtaining a court order was too expensive for many separated parents.
- the courts were ordering consistently low levels of maintenance which did not reflect the capacity of parents to provide financial support for their children.
- orders made by the courts could not be easily updated to take account of inflation or changes in the parents' capacity to pay.
- it was difficult to enforce court orders. As a result, less than 30% of child maintenance was being paid.
- there had been a rapid increase in the divorce rate with a corresponding increase in the number of parents receiving government benefits.
In October 1986 the Federal Government proposed reform in 3 areas:
- enforcement of maintenance collection through the ATO
- use of a formula to determine the level of maintenance, and
- the application of this formula by an administrative process.
In February 2006 the Federal Government announced further reforms to the child support scheme. These reforms represented the first major reforms to the scheme since its inception. The reforms were prompted by changing social trends and a desire to place increased emphasis on shared parental responsibility. These reforms aim to recognise the importance of both parents remaining actively involved in their children's lives after separation.
These reforms to the scheme were implemented in a 3 stage process with the first stage reforms commencing in July 2006, the second stage in January 2007 and the final stage in July 2008.