CHAPTER 7Looking at the agencies

Child Support Agency menu: Consistency of change of assessment decisions | Service delivery

The Child Support Agency was established in 1988 to administer the Child Support Scheme, which provides for the assessment, collection and disbursement of child support. The scheme was implemented to require compulsory payment of child support based on the comparative incomes and caring responsibilities of both parents.

The Child Support Scheme operates under two pieces of legislation—the Child Support (Registration and Collection) Act 1988 and the Child Support (Assessment) Act 1989 (Child Support Assessment Act). Together, these Acts enable the registration of child support cases, calculation of child support assessments, enforcement of child support collection and disbursement of payments received. Payees are those parents entitled to receive child support, while payers are those responsible for paying child support.

In 2006–07 the Ombudsman received 1,790 approaches and complaints about the CSA, compared to 1,927 in 2005–06. Figure 7.4 shows the trend in approaches and complaints about the CSA over the past five years. We investigated 29% of the 1,779 approaches and complaints finalised in 2006–07.

The CSA and the Child Support Scheme continued to be a topic of much discussion in 2006–07, following the government’s acceptance of the majority of the recommendations contained in the 2005 report of the Ministerial Taskforce on Child Support. Stages 1 and 2 of the child support reform package were implemented on 1 July 2006 and 1 January 2007, respectively.

From our perspective the most notable of the changes was the introduction of a right of appeal about child support matters to the Social Security Appeals Tribunal (SSAT). Prior to 1 January 2007, if parents wished to seek review outside of the CSA, it was necessary for them to make an application to a court with family law jurisdiction. Given the time and cost such an application involved, many parents would disregard this option and raise their disagreement through a complaint to the Ombudsman. Although it is difficult to accurately assess the reasons for the decrease in complaints to this office about the CSA in 2006–07, the introduction of the SSAT as a no-cost review mechanism may have contributed to this reduction.

The final and most significant part of the reforms, which is the new child support formula, will be implemented from 1 July 2008. During 2007–08 our focus will be on training our investigation staff about the changes and remaining abreast of developments as further information becomes available.

The main themes that featured in approaches and complaints in 2006–07 were the consistency of decisions made through the ‘change of assessment in special circumstances’ process, and service delivery issues in the form of delays and the quality of advice provided to customers. A brief description of our handling of these topics follows.

‘The main themes that featured in approaches and complaints ... were the consistency of decisions ... and service delivery issues ...’

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Consistency of change of assessment decisions

The Child Support (Assessment) Act sets out a statutory formula for calculating the rate of child support payable, taking into account the relative incomes and caring responsibilities of both parents. Although this formula was devised on the basis of research into the general costs of raising children, the Act provides for an alternative assessment mechanism where the child/children or either parent has special circumstances that are not readily recognised by the child support formula.

In order to be satisfied that a change to the assessment is warranted, the CSA must find that one of ten reasons involving the special circumstances of the child/children or either parent make the formula assessment unfair. Under Reason 8 a departure from the assessment may be warranted where the income, earning capacity or financial resources of one or both parents is not accurately reflected by a strict application of the formula.

During 2006–07 we received a number of complaints regarding the treatment of depreciation expenses in assessing the income of self-employed parents under the ‘change of assessment’ process. The case study Change of assessment illustrates the complexity of some of the processes.

In response to this and other complaints, the CSA undertook to provide additional guidance to decision makers about the treatment of depreciation expenses in the ‘change of assessment’ process.

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Service delivery

The CSA had approximately 742,000 active cases at 30 June 2006, 47% of which were registered for collection of child support by the CSA. With such a large volume of active customers, CSA staff are required to provide services and advice to a sizeable section of the Australian public.

In 2006–07 we received a number of complaints about the CSA’s service delivery which centred around two main themes—delays, and the accuracy and completeness of advice.

Delays

Complaints about delays focused on three central areas:

• the CSA’s core business of assessing (under the formula and the ‘change of assessment’ process), collecting and disbursing child support
• responding to customer complaints and correspondence
• decision making, specifically in relation to compensation claims and requests under the Freedom of Information Act 1982.

As CSA has a well-developed complaint-handling system, we often refer such complaints back to CSA in the first instance. In one case we investigated, a CSA customer complained about the CSA’s failure to respond to his freedom of information (FOI) request after more than three months and several written requests for an update. When our office contacted the CSA, they acknowledged that one of their FOI units was experiencing difficulty in processing requests within the statutory timeframe as a result of a staffing shortage.

In response to our investigation the CSA apologised to the complainant and gave an undertaking that his FOI request would be prioritised for completion. We understand that the area involved has subsequently been allocated additional staff in an effort to ensure similar delays do not recur.

Incomplete and inadequate advice

The Child Support Scheme is a complex and often daunting system for its customers to navigate, meaning that parents may often choose to make important financial decisions based primarily on the advice given to them by CSA staff. During 2006–07 we received a number of complaints where CSA customers claimed to have been disadvantaged by incomplete or inadequate advice.

In one complaint, a payee claimed he was contacted by CSA staff who asked if he would be willing to ‘discharge’ the child support arrears owing to him. This suggestion appeared to have been framed as a gesture of goodwill that would increase the likelihood of the payer meeting her future responsibilities. The payee agreed to discharge the arrears amount, reducing the payer’s balance to nil.

‘The Child Support Scheme is a complex and often daunting system for its customers ...’

The payee was subsequently advised that, as a result of new information about the payer’s circumstances, his past child support assessments had been significantly reduced. This retrospective adjustment meant the payee was not only no longer entitled to the arrears amount he had discharged, but that he was also found to have been overpaid. The overpayment situation would not have occurred if the arrears amount had not been discharged, because the two amounts could have been offset against one another.

Our investigation led us to conclude that the CSA had not provided the payee with sufficient information about the possible ramifications of discharging the arrears to enable him to make a fully informed decision. At the conclusion of our investigation the payee advised he intended to pursue compensation from the CSA for his lost entitlement to child support.