Parents' pay targeted in proposed law change

Peter Dunne. Photo / Mark Mitchell

Legislation allowing child support payments to be deducted directly from parents' pay packets may be enacted by the end of the year, says Revenue Minister Peter Dunne, sparking fears the fast-tracked laws will not be properly scrutinised.

After a long period of public consultation, Mr Dunne announced the changes intended to tackle the $2.3 billion mountain of unpaid child support which has accumulated since the laws were last changed in 1992.

The changes include altering how payments are calculated, having payments taken directly from parents' pay packets, and easing up on the penalties for those who default on payments.

The number of nights a year used to determine shared care would be reduced from 40 per cent to 28 per cent of nights, and the penalty rules for parents defaulting on payments would be made less punitive so as to not discourage parents from resuming payments.

Mr Dunne said many parents rightly felt the current system was unfair, and that changes were overdue.

"We have reviewed it, we have called for public submissions and we have listened to them, and I think the changes we are now proposing reflect the very strong feedback we received," he said.

However he did not expect everyone to be pleased with the changes.

"On something as contentious and as emotionally charged as child support, which only ever comes into people's lives when their relationship has broken down, it is not about trying to please people. It is about creating a system that people feel is fundamentally fair, and crucially, that they feel is for the benefit of their children."

Mr Dunne said the changes would be in legislation introduced to Parliament "in the next few months" but would not take effect until April 2013 and April 2014.

Labour revenue spokesman Stuart Nash said the changes were overdue.

"My one concern is that this is going to be put through later on in the year. There's only four sitting weeks left. There's no way you can can get this through the House unless it is done under urgency. What I would want from Mr Dunne is assurance this won't be rushed through under urgency before the election because I don't think that is the way to treat this legislation that affects 200,000 children."

Meanwhile, lawyer Catriona MacLennan said the proposed changes represented a swing in favour of those parents paying child support.

At present paying parents could reduce their commitment if they cared for the children 40 per cent of the time or 146 nights a year.

That meant a person on $45,000, with two children, who paid $7400 a year could drop to $2660 a year. Under the changes the threshold for reducing payments would drop to 28 per cent of nights.

"The definition of fairer is always going to be contentious ... that's going to be seen as a pretty major advantage for the paying parents," Ms MacLennan said. She was concerned that the balance was tipping away from the receiving parents.

EMOTIONAL BATTLEFIELD

$2.3b total child support debt
$605m assessed but unpaid debt included
$1.66b of unpaid penalties included