Back to All News

Baby bonus goes off the rails

The Australian Greens support the need for reform to the Child Support Scheme. The last time we debated the new scheme we indicated our support for it.

However, we raised some concerns. The Greens are supportive overall of the intentions of the proposed changes in the Families, Community Services and Indigenous Affairs Legislation Amendment (Child Support Reform Consolidation and Other Measures) Bill 2007. However, as we have said previously, we have several concerns about this bill in particular and also some ongoing concerns. Firstly, the Greens are concerned about the nature of the amendment to the baby bonus scheme, which I will go to shortly. Secondly, yet again I am raising the issue of principal carers, as I will ad infinitum until the government takes this on board. Thirdly, we are particularly concerned about the development of models to investigate the impact of the changes to the child support arrangements.

The Australian Greens recognise the potential temptation of misuse associated with the lump sum baby bonus payment which led to the proposed amendments in this bill. However, we believe that this issue extends to a wide range of expectant parents, not just to those under the age of 18. We believe that these provisions should apply to all recipients of the baby bonus, not just a subgroup chosen purely because of their age. This is why we recommended in our minority report on the Senate Standing Committee on Community Affairs inquiry that the provisions relating to periodic payment be extended to all recipients of the baby bonus and not be limited to mothers under the age of 18.

Let us consider for a moment the list of reasons that the government has given for dishing out the baby bonus in fortnightly payments to those under the age of 18. The list I am about to talk about is from the Family Assistance Office website. It came out on 11 January. It actually referred at that time to the changes to process that were made from 1 January 2007 to 1 July 2007 for young people under the age of 17 who applied for maternity payment and to the decision that it would be made in 13 fortnightly instalments.

The reasons that people who are under 17 who apply at the moment have to receive fortnightly payments instead of one lump sum payment include inexperience in handling large sums of money; situations where an applicant may be subject to pressure to use the payment unwisely; a history of experience of domestic or family violence; a history of difficulties in managing finances; situations where an applicant may be vulnerable to exploitation; situations where applicants have gambling problems or substance addiction; situations where applicants are homeless or at risk of becoming homeless; situations where applicants previously had or currently have a child which is subject to child protection; and where applicants have intellectual disability or mental illness. It could be one or all of those reasons.

I ask you to consider this list of reasons. Consider how many of them apply exclusively or particularly to teenage parents and how many we might in fact expect to apply, as much or even more, to an older group of expectant parents. Let us look at inexperience in handling large sums of money. Yes, you would expect that younger people would be more likely to have less experience with large sums of money but by far not exclusively so. Many people over the age of 18 have great difficulty in managing large sums of money. Let us look at situations where applicants may be subject to pressure to use the payment unwisely. There is no reason to expect that a person over 18 may not be pressured to use the money unwisely. It is the same with a history of experience of domestic or family violence. Please, no-one try to tell me that domestic or family violence is restricted to those under the age of 18! Unfortunately, the statistics prove otherwise. It is the same with inexperience in handling large sums of money and a history of difficulties in managing finances. I expect that there are going to be a lot more people with a history of difficulties in managing finances in the over-18 age group. The arguments that are given as reasons that people under 18 should not receive a lump sum apply equally to those over 18.

Whether it is called a baby bonus or a maternity payment or an allowance and whether we are discussing child endowment or paid maternity leave, the tone of these debates, unfortunately, has changed little in nearly 100 years. From the introduction of the maternity allowance in 1912 to the royal commission on the child endowment scheme in 1929 and on to the series of ongoing debates concerning paid maternity leave, we have consistently seen governments questioning the ability of young women, particularly young single mothers, to manage their finances. It is back to the future for the new paternalism. What was paternalistic in the 1920s is equally paternalistic now.
The government, we believe, has failed to make a convincing argument as to why these problems apply to young people but not to older people or to give a rationale for the cut-off age. If we are concerned that handing over large sums of money is a bad idea then we should apply the same reasoning to all. If this is an admission from the government that the baby bonus was not good policy as a lump sum payment for those under 18 years of age, we maintain that it is not good policy for those over 18 years of age. To achieve the objective of the baby bonus-or, as it used to be known, the maternity payment-it would be better to give fortnightly payments to all, not just to those under 18.

The Greens appreciate that there are some circumstances where a large lump sum payment may be appropriate for the one-off purchase of a large item relating to the needs of a new family. Perhaps it would be to help expectant parents to purchase baby furniture and equipment to set themselves up to care for the new child. If you think about it, it is highly likely that it will be the under-18-year-olds that will particularly need help to buy that sort of equipment. Therefore, while we support the intention of moving to periodic payments rather than one lump sum, we think there should be some discretion given to Centrelink to make part of the payment or all of it as a lump sum if the rationale is provided. To this end, the Greens minority report also recommends that the format of the periodic payments should be able to be varied where there is a strong case for a lump sum payment or on the recommendation of a qualified social worker. The Greens will be moving amendments to this effect in the committee stage of the bill.

I come now to the issue of principal carers. I have raised this issue in this place before. As I said, I promise I will keep raising it until this inequity is dealt with. The Australian Greens remain concerned about the potential impact of changes to child support on low-income households, particularly when they are considered in combination with the financial impacts of the changes introduced through Welfare to Work. I will raise some of those issues again shortly.

We raised our concerns first in our additional comments to the report on the child support legislation amendment. In fact, we raised them before that. We raised them again in the minority report on this legislation. We are seeing radical changes to the Family Law Act and to the child support act, and these changes are happening at the same time.

The previous changes to Welfare to Work introduced the concept of a principal carer. What has happened under the Family Law Act, as I have articulated before, is that it is now moving to the concept of equal shared care. We are moving to a model of 50-50 shared care as the preferred social model. On the other hand, for the purposes of income support, the government says that there is only one principal carer and that person is responsible for the care of the child. So far as Centrelink is concerned, if you have 50-50 shared care, it would essentially be a case of first in, best dressed. If you happen to be nominated as the parent with principal care of the child, you get the benefits under the Welfare to Work legislation. We now have a number of mothers coming forward who nominally have 50-50 shared care but are in reality shouldering an unequal part of the parental care burden because they have not been recognised as a shared carer or their shared care has not been recognised through the principal carer provisions of the Welfare to Work provisions. They are suffering and their children are suffering as a result of the inability of the government to make up its mind about which parental care model it advocates: either it is 50-50 through the family law process-the legislation for which has now gone through-or it is a matter of favouring one parent and giving that one parent control and giving the benefits of that; but you do not give any benefits to the other parent. If you have 50-50 shared care, you cannot possibly expect to choose one parent in the income support system, and not the other, to be the parent that gets the benefit. That leads to inequality in the child's life.

The central focus needs to be the best care for our children and, also, what is best for the future of our nation. Surely the best would be for a child to grow up with a basic level of income support. This is not what is being provided through the current system of a principal carer. In evidence to the Senate Standing Committee on Community Affairs on this particular bill, the National Council of Single Mothers and their Children Inc again pointed out the inequity of the principal care process. Ms Taylor said:

On the one hand we have family law and child support law encouraging shared parenting and acknowledging where there is 35 per cent or more of care-between 35 to 65 per cent care is considered shared-but, on the other, on income support policy under social security law, only one parent can be given principal carer status leaving the other parent and the children exceptionally vulnerable.

They said in their submission: This means that the half-time children in the household of the person who is not deemed under Social Security law to be the Principal Carer will not attract the protections available to Principal Carers in the income support system. The impact of this disjuncture in definitions is most acute for young children whose parents are both dependent on income support and are thus likely to be highly disadvantaged.

This is just not a matter of income but it is also a matter of the additional benefits and entitlements such as concession cards and access to pharmaceutical benefits and child care.

The Greens believe that urgent reform is needed to address this disparity and inequity. This is an unfair system. That is why we have recommended in our minority report that the income support definition of 'principal carer' be aligned with the intent of the family law changes to reflect the concept of shared parenting such that, where parents sharing the care of children each receive income support and the difference in percentage responsibility is 12 per cent or less, both are deemed to be principal carers. It is not too hard to understand the inequity and to fix it. It is not rocket science.

I now move on to the financial impact of this legislation and its intersection with the Welfare to Work system. Senator Moore touched on this. The Greens are concerned that there is no publicly available modelling to estimate the impact of the new system on existing child support recipients and payers. While we are pleased that FaCSIA will be monitoring the impact of the changes following their implementation, we believe that modelling should occur before this implementation in order to assess potential impact.

Monitoring after the fact means that many families may have already been adversely affected before we, the community, become aware of the extent of the problem. As there will inevitably be a sufficient time delay before the monitoring data will be available and can be acted upon, families with young children may be suffering for some time before measures can be put in place to rectify these adverse impacts. It is hard enough raising kids at the best of times. I do not know if there are many in this place who truly understand and readily appreciate the additional stress and suffering brought about by the severe financial pressures when you are trying to care for a young family in extremely trying circumstances and on an extremely low income. We should never forget that single parents-and it is largely single mothers-are more often than not very highly overrepresented in the lower income areas. This is why we need to model what these impacts are before implementation. The Greens believe that modelling of the potential impact should be done immediately and that provisions should be put in place to protect low income families, who may lose income and be put under unconscionable financial stress as a result of these changes.

We acknowledge that these changes to child support are important and that the system needs fixing. We are deeply concerned about the unintended consequences for families that are already on low incomes. It may stretch their budgets beyond breaking point. Such protections are critical given the risk of poverty already confronted by many of these families. That is why the Greens recommended in our minority report that an appropriate system be developed to model and investigate the impact of the child support income changes when they are combined with the Welfare to Work changes. Both of these changes will potentially lower the income of some families. We know it will not be all of them, but some families are going to have their incomes lowered.

We need a system that is fair and equitable and that puts the welfare of our kids first. It makes no sense for the government to simultaneously advocate two radically different models of parental care. The contradictions between the notion of equal shared care in child support law and the notion that there is only one principal carer under welfare law must be resolved.

To decide arbitrarily that those under the age of 18 are not capable of handling a lump sum and list the reasons why this is so, which equally apply to those aged 18, is to me also inequitable. The Greens believe that a far better way of delivering, as it is changed in the law, what is now called the baby bonus would be to do so in periodic fortnightly payments.

We take the risk that these changes, particularly those brought by Welfare to Work, the child support changes and the family law changes, may adversely impact on some families and children who are already living in or very near poverty. We should be modelling and looking at these impacts now so that we do not wait until the crisis occurs before taking action.

As I have outlined, the Greens will be moving amendments to this legislation in the committee stage, both amending the principal carers provision and requiring the baby bonus payments to be made in periodic payments with the possibility of variation at the discretion of the secretary of the department.

Back to All News