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Child support failure costs children and Budget

Anti-Poverty Week and the National Council for Single Mothers and Their Children call on the Albanese government to fix the child support system that is currently failing to collect at least $2billion owed to children.

“It is a scandal that we don’t know the total amount of what is owed to children.  What we do know is that of the 330,000 parents in the Agency Collect scheme, 33%  have a debt that is more than one month old, a significant increase from 24% in 2015-16.  We estimate that debt (which excludes amounts collected privately or written off) is likely to be closer to $2 billion,” said Anti-Poverty Week ED Toni Wren.

“We just need the Tax Office and the Child Support Agency to ensure that people (mostly men) owing child support lodge their tax return annually. This is a very simple fix that will reduce child poverty,” said National Council of Single Mothers and their Children CEO Terese Edwards.

How failure to collect child support plunges children into poverty:

  • Child poverty is unacceptably high in Australia, with more than one in six children growing up in poverty, diminishing their lives now and in the future.
  • Nearly half the children in sole parent families live in poverty (44%) compared with 13% for children living with both parents. In single parent families in which the main earner is a woman the rate of poverty (37%) is twice that in which the main earner is a man (18%).
  • Women comprise 85% of payees and 70% of payees have care of the children, the vast majority of time (more than 86% of the year).
  • Around 1 million children in Australia (nearly 1 in 5) should be receiving child support through the scheme, but for more than half it’s impossible to determine if they are receiving it.
  • As recently as March 2022, nearly one third of child support is assessed at the minimum rate of less than $10 a week (and 60% are for less than $100 a week) and penalties for late payment (if received), go to the Federal Government, not the children.
  • The median adjusted annual taxable income of a child support payer was $52,024, for a payee it was $32,420.
  • At least 200,000 people (mostly men) who owe child support have failed to submit a tax return for more than two years and more than 16,000 for more than 10 years.

“A recent parliamentary inquiry headed by former MP Kevin Andrews agreed with our statement that not paying child support is really stealing from children.  It puts enormous stress on the parent raising the children – 85% are mothers, who have told us they are forced to reduce food purchases and struggle to pay rent and bills,” said Terese Edwards.

“Growing up in poverty diminishes children’s lives now and in the future. The Government can act now to reduce child poverty by responding to these serious problems with the child support scheme,” said Toni Wren.

Read Anti-Poverty Week Briefing: Child Support failure costs children and Budget

Read story in Sydney Morning Herald/The Age, 18/8/22Child poverty: Tighten tax system to target child support avoidance, single parents say

Listen to ABC Radio The World Today interview, 18/8/22 – Child support dodgers: ‘make them file a tax return’  

Download Media Release PDF