Tue Jun 3

‘Unfair and unreasonable’ – report finds $1.9 billion in unpaid child support in system rife with financial abuse

Written by Kay Cook, Professor and Associate Dean Research, School of Social Sciences, Media, Film and Education, Swinburne University of Technology

The Commonwealth ombudsman has released his long-awaited report ^[1] into the “weaponisation” of the child support program.

He has identified widespread financial abuse throughout the system. This includes parents not making payments, lying to reduce their income and being abusive or violent to stop ex-partners seeking help.

The ombudsman has found Services Australia, which administers the scheme, is not using its available powers to stop the abuse and force ex-partners to support their children. As a result, 153,000 parents have a combined A$1.9 billion in unpaid child support.

The report adds to the growing evidence the child-support scheme is failing families, especially women. The system hasn’t been working for a very long time, if it ever did.

Ombudsman’s report

More than 1.2 million separated parents have child-support arrangements for an estimated one million children. Some 84% of parents receiving payments are women.

According to the report, 32% of complaints about the child-support scheme reported it was being weaponised by ex-partners. This figure only includes people who were persistent enough to proceed all the way to the ombudsman.

In addition, these complainants were women who braved possible repurcussions from ex-partners, who may be abusive. Given the context of fear, the statistic is undeniable.

Ombudsman Iain Anderson has found the abuse is being made worse by the tax system, which calculates income assuming all support payments have been made, even if they haven’t.

Preventing weaponisation is really important because child support is all about children – vulnerable children – who need to be financially supported while they are growing up.

The same problems with the tax system were identified by a report ^[2] earlier this year by the Inspector General of Taxation and Tax Ombudsman Ruth Owen.

Toothless tiger

The report finds Services Australia, the government agency responsible for Centrelink, is acting in an “unfair and unreasonable” manner by not using its available powers to enforce payments.

This passive approach is unfair. It allows some paying parents to manipulate the system to avoid their financial responsibility in raising heir children largely without consequences.

Commonwealth Ombudsman Iain Anderson sitting behind a mictophone.

Commonwealth Ombudsman Iain Anderson says Services Australia has amplified the financial abuse in the child support system. Lucas Koch/AAP ^[3]

The report recommends Services Australia:

publicly outline its plan to tackle financial abuse through the child support system
introduce a range of measures to enforce child support payments
refine data collection approaches
review its Lodgement Enforcement Program
support its staff to undertake training on financial abuse through the child-support system
review its change of assessment process.

The report notes the legislative provisions underpinning Services Australia are also “unfair and unreasonable”.

Recommendations for government action include

Circuit breaker

There have been countless reviews calling to rebalance the system in the interests of women and children.

They include our 2023 report ^[4] on child-support weaponisation and the government’s financial abuse inquiry ^[5] in 2024.

Yet there has been scant action to date. Indeed our survey of 540 women ^[6] exposed the scale of the problem for the first time.

This new ombudsman’s report might be the final push to action that the government needs due to its timing and specifics.

First, both Minister for Women Katy Gallagher ^[7] and newly appointed Minister for Social Services Tanya Plibersek ^[8] have acknowledged the need for change.

Minister for Social Services in a peach coloured suit sitting in a room with other people

Minister for Social Services Tanya Plibersek is in charge of Services Australia which has been told by the Ombudsman to implement the recommendations as soon as practicable. Lucas Koch/AAP ^[9]

The 2024 women’s budget statement ^[10] acknowledged child support was being abused. An internal review had been taking place to examine how the child support, family tax benefit and taxation systems are being weaponised.

Second, the ombudsman’s report draws on Services Australia data to shed light on the issue. Much of this information has not previously been made public. Some statistics have been reluctantly released due to dogged questioning in Senate Estimates ^[11] over many years by the new Greens leader, Larissa Waters.

The ombudsman used his legislative powers to request and obtain information from Services Australia, as well as attending its offices to furnish his report. The data adds substantial weight to the findings.

A safer system

Many of the root problems with the child-support program stem from reforms brought in during the Howard era ^[12], compounded by the welfare to work ^[13] measures which targeted single parents.

Immediately after separation can be the most dangerous time for women. Perpetrators can use mandatory government systems, such as child support, to financially control and harm ex-partners and their own children.

The ombudsman’s report will give some hope to the 12% of Australian families headed by single mothers ^[14] that the government will take action to make the system safe and fair for all women and children.