The distributional and financial impacts of the new Australian Child Support Scheme: A ‘before and day-after reform’ comparison of assessed liability

Abstract

Sweeping changes to the Australian Child Support Scheme were recently introduced, featuring a dramatically different system for the calculation of child support. The reforms were intended to respond to ongoing concerns about equity and changes in social expectations and practices in gender, work and parenting. The extent to which the new Scheme is ‘fairer’ and will improve the wellbeing of children and their families needs to be tested. Drawing on published Government data, this article examines the initial distributional impacts of the new Scheme and discusses key policy and research issues arising from these data. At a general level, non-resident parents (mostly fathers) were more likely than resident parents (mostly mothers) to experience net gains under the new Scheme. Low-income families, and resident parents with part-time or casual employment, appear to be among those most likely to have been hardest hit by the recent reforms, though the government modelling suggests that net losses are likely to be $20 or less a week in absolute terms. While the paper does not assess behavioural changes resulting from the child support reforms, it is important to keep a watching brief of how the new Scheme is evolving on the ground.