CHILD SUPPORT LEGISLATION AMENDMENT BILL 2004 Explanatory Memorandum

Commonwealth of Australia Explanatory Memoranda

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CHILD SUPPORT LEGISLATION AMENDMENT BILL 2004

2004 THE PARLIAMENT OF THE COMMONWEALTH OF AUSTRALIA HOUSE OF REPRESENTATIVES CHILD SUPPORT LEGISLATION AMENDMENT BILL 2004 EXPLANATORY MEMORANDUM (Circulated by the authority of the Minister for Family and Community Services, Senator the Hon Kay Patterson)

CHILD SUPPORT LEGISLATION AMENDMENT BILL 2004 OUTLINE AND FINANCIAL IMPACT STATEMENT This Bill contains non-Budget minor policy measures as follows: · move into the principal child support legislation those provisions currently contained in regulations relating to overseas maintenance arrangements (thus, honouring a commitment made by the former Minister for Family and Community Services, Minister Newman, during passage of the enabling provisions for the regulations); · make minor or consequential amendments to the family law legislation; · improve equity between parents in access to court and streamline certain review processes; and · make other child support minor policy refinements and technical corrections. Commencement: Royal Assent, except for the overseas maintenance provisions and two minor policy measures, which are to commence 28 days after Royal Assent (to enable regulations to be made), and one technical amendment, which is to commence retrospectively to correct an earlier incorrect amendment. Financial impact: Negligible

CHILD SUPPORT LEGISLATION AMENDMENT BILL 2004 Clause 1 sets out how the Act is to be cited, that is, the Child Support Legislation Amendment Act 2004. Clause 2 provides a table that sets out the commencement dates of the various sections in, and Schedules to, the Act. Clause 3 provides that each Act that is specified in a Schedule is amended or repealed as set out in that Schedule. This Explanatory Memorandum uses the following abbreviations: · `Assessment Act' means the Child Support (Assessment) Act 1989; · `Registration and Collection Act' means the Child Support (Registration and Collection) Act 1988; · `Family Law Act' means the Family Law Act 1975; · `Assessment Regulations' means the Child Support (Assessment) Regulations 1989; · `Registration and Collection Regulations' means the Child Support (Registration and Collection) Regulations 1988; · `Assessment Overseas Regulations' means the Child Support (Assessment) (Overseas-related Maintenance Obligations) Regulations 2000; and · `Registration and Collection Overseas Regulations' means the Child Support (Registration and Collection) (Overseas-related Maintenance Obligations) Regulations 2000. 1

Schedule 1 - Incorporation in primary legislation of matters dealt with by regulation Summary This Schedule moves into the principal child support legislation those provisions currently contained in regulations relating to overseas maintenance arrangements (thus, honouring a commitment made by the former Minister for Family and Community Services, Minister Newman, during passage of the enabling provisions for the regulations). The Schedule also makes minor or consequential amendments to the family law legislation. Background The Child Support Legislation Amendment Act 2000 amended the Assessment Act, the Registration and Collection Act and the Family Law Act to insert regulation making provisions that would enable Australia to fulfil its international maintenance arrangements. Regulations were subsequently made to prescribe, in relation to countries, and parts of countries, with which Australia has maintenance enforcement arrangements, all matters relevant to the recognition and enforcement of child support and spousal maintenance liabilities. When the regulation making provisions were inserted into the three pieces of principal legislation, they each included a specific provision that would allow the overseas related regulations to be inconsistent with the principal legislation and to prevail to the extent of any such inconsistency. These specific provisions are subsection 163B(3) of the Assessment Act, subsection 124A(3) of the Registration and Collection Act and subsection 124A(3) of the Family Law Act. This approach was taken to overcome the difficulty of drafting and passing principal legislation amendments within the timeframe necessary for the international arrangements. During passage, however, a commitment was made to the Senate on 10 April 2000 by Senator Newman (then Minister for Family and Community Services) to the effect that provisions in the forthcoming regulations that were inconsistent with the principal legislation would be brought into the legislation as soon as possible. This Schedule gives effect to that commitment. 2

Complementary regulation changes will follow enactment of this Bill. These changes will mostly be to remove provisions that will now appear in the principal legislation, to avoid duplication and to ensure that the new provisions work correctly. However, there are some provisions (notably, administrative type matters, the list of reciprocating jurisdictions and specific references in some provisions to the current Australia-New Zealand Agreement) that are to be left in regulations for reasons such as similarity to other provisions already in regulations and the potential need for amendment (mainly, to add or remove relevant countries or to add references to any future agreements). Even so, it is intended that the few provisions that are to remain in child support regulations be relocated to the main body of regulations for the two child support Acts, the Assessment Regulations and the Registration and Collection Regulations. As a general principle, the provisions in the regulations that are to be relocated into the principal legislation are not being amended, apart from necessary technical and style changes. However, there are some specific policy improvements and rationalisations being made to some of the provisions - these are detailed below. Child support policy refinements Meaning of `reciprocating jurisdiction' The overseas child support provisions relate to Australia's international maintenance arrangements with certain foreign countries, or parts of countries, known as `reciprocating jurisdictions'. These jurisdictions are specified in regulations and are the same for both the Assessment Act and the Registration and Collection Act. However, the provisions are being amended to reflect the fact that enforcement against payers of child support agreements and child support assessments may be contrary to the law of some of those jurisdictions. Accordingly, it is to be provided that an assessment may not be made, and a child support agreement may not be accepted, in relation to a payer who is a resident of a reciprocating jurisdiction that is specified in regulations to be a jurisdiction of that kind. One parent to reside in Australia Clarifications are being made in several provisions of the need for one parent to reside, or continue to reside, in Australia. Some of the provisions currently envisage that both parents may live overseas - this is not the intended policy. Such cases should not be dealt with under Australian child support law. 3

Applications from overseas and role of overseas authority New provisions will clarify that a parent who is a resident of a reciprocating jurisdiction may apply under Australian law for a child support assessment, or for registration of a child support liability. These new provisions also clarify the correct avenue for making such an application. The following is to be provided: · A payee application may be made if the payee is a resident of a reciprocating jurisdiction. However, it must be made either by the payee and given by the overseas authority of the jurisdiction to the Australian Child Support Registrar, or be made by the overseas authority itself, on behalf of the payee. This latter capacity for the overseas authority to initiate an application reflects the authority's legitimate role in determining whether it is appropriate under the law of the reciprocating jurisdiction to make an application under Australian law. · A payer application may be made if the payer is a resident of a reciprocating jurisdiction. This may be made by the payer and given by the overseas authority to the Registrar - otherwise, the payer must apply directly to the Registrar. There is no need in this case to provide for the overseas authority to initiate an application. These arrangements are consistent with the underlying policy intentions of the international maintenance arrangements - firstly, that payees apply for assessment or registration in the jurisdiction in which they reside (some jurisdictions can issue assessments or liabilities themselves) and, secondly, that applications should generally be received via overseas authorities so that both Australia and the overseas authority are fully aware of current processes. However, if an overseas authority does make an application on behalf of a payee, it is the payee who remains the `applicant' for the purposes of the legislation, because only the payee (not the authority) can meet the criteria to make an application (see, for example, subsection 25(2) of the Assessment Act). A further new provision will give an overseas authority the power to veto an election by a payee to end a child support assessment that is in force because of an application initiated by the overseas authority. This is equivalent to an existing provision for `domestic' cases, in which the Secretary of the Department of Family and Community Services has a power to veto the ending of an assessment, to protect potential outlays on Australian family tax benefit (section 151A of the Assessment Act). 4

Child support agreements It is to be clarified that child support agreements (between parents) are on a similar footing to child support assessments for most overseas purposes, just as they are for domestic purposes. Accordingly, it is to be provided that a child support agreement may be made between parents, one of whom is a resident of a reciprocating jurisdiction. This is to avoid current situations in which, for example, a payer overseas signs an agreement drafted by a payee in Australia but then cannot have the agreement accepted by the Registrar because the payer resided overseas when the agreement was signed. As with assessments, for this rule to apply, one parent must reside in Australia - they cannot both reside overseas. However, a further new provision will prevent the acceptance by the Registrar of a child support agreement that would override a child assessment that is in force because of an application initiated by an overseas authority. In that case, the overseas authority will have the power to veto the agreement. This is consistent with the arrangements described above for child support assessments. Preventing dual liabilities and repeated new liabilities A child support liability may arise from an administrative child support assessment, from a court order, or from a child support agreement between parents. In domestic child support cases, a court order cannot be obtained if the parents are eligible for an administrative assessment. Furthermore, an agreement overrides an assessment, at least to the extent addressed by the agreement. Therefore, there is no possibility of there being more than one domestic liability registered for collection at any one time for the same parents. Nor is there any possibility of the parents attempting to better their respective positions by repeatedly seeking new liabilities (although the merits of the current liability are subject to the usual rights of objection or appeal to court). However, this issue has proven to be difficult in overseas cases. As a general principle, liabilities should be raised in the jurisdiction in which the payee resides. However, because that is not always possible, it remains open that (depending on the circumstances) either parent may seek an administrative assessment or court order elsewhere. Accordingly, it is possible at any one time for there to be a liability raised by each of the two parents. Furthermore, this situation may be manipulated by one or the other party, or both, as a way of seeking a better personal outcome through a new liability, rather than having the merits of the original liability reviewed in the proper way. Therefore, a more structured way of handling these arrangements is being set up, without unduly limiting parents affected by overseas residence. The following refinements are to be made: 5

· To eliminate the possibility of dual liabilities, it will be provided that one registered maintenance liability ceases to have effect if a second maintenance liability is registered in relation to the same child and parents. (The first liability will, though, remain in effect for the purpose of recovering any arrears under it.) · However, if the second liability (ie, the one that came to the attention of the Registrar second) actually arose (ie, the liability was created) before the first liability (ie, the registered one), the second one must not be registered. (The second liability may, though, be registered for the purpose of recovering any arrears under it.) · To minimise repeated new liabilities, the Registrar will be able to refuse to accept an application for an Australian child support assessment that would override an overseas liability already registered (see example below). · However, because the Registrar may in fact accept an application for assessment in some of these cases, there needs to be provision for an ensuing liability to be registered. This is not provided for at present if it should be the payer who seeks the assessment, because a payer cannot apply for registration. Accordingly, this is now to be provided for, but only if either the payer or the payee is a resident of a reciprocating jurisdiction. If it is the payer who is a resident of a reciprocating jurisdiction, the application for registration may be made by the payer and given by the overseas authority to the Registrar - otherwise, the payer must apply directly to the Registrar. · A further new provision will ensure that an Australian administrative assessment has the same effect on an existing overseas maintenance liability as on an existing domestic liability. It will provide that, where an amount of child support becomes payable for a child by a liable parent to another person under an administrative assessment, an existing overseas maintenance liability for the same child payable by the liable parent to the other person ceases to have effect. Generally, parents are free to take advantage of the flexibility of the international arrangements for child support. The intention is that the new discretion to refuse an assessment application would be used, sparingly, to prevent an abuse of the arrangements that would be manifestly unfair to either parent. An example of where the discretion might be applied is: - A payee living in a reciprocating jurisdiction and a payer living in Australia. - The payee applies for, and obtains, a court order for child support in the reciprocating jurisdiction, which is subsequently registered for enforcement in Australia. - The payer's income in Australia increases and the payee applies for an Australian administrative assessment. - When the Australian assessment is registered, it overrides the previously registered overseas court order. 6

- The payer's income in Australia drops and so the payee applies for another court order in the reciprocating jurisdiction, which is again registered for enforcement in Australia, and thereby overrides the administrative assessment. - The payer's income increases again and the payee applies again for an administrative assessment. Enforcement overseas without payee application Currently, domestic liabilities may be registered by the Registrar for collection to occur, at the choice of the payee. If a liability is to be enforced overseas, there must currently be an application by the payee. However, in some instances, the application for registration will be sought by an overseas authority, under the law of the overseas jurisdiction, or by the payer. To reflect more appropriately the situations in which an overseas liability may arise, the Registrar will be able to seek enforcement of a liability overseas without a specific application by the payee, if considered appropriate. Overseas income Amendments will extend the application of the provisions that currently apply to determining overseas income in relation to a person covered by an international maintenance arrangement. These provisions should also cover a payee who is a resident of a reciprocating jurisdiction but covered by the purely domestic Australian child support provisions. Such a situation is possible under the existing legislation (because a payee does not have to be a resident of Australia), and the same procedures and principles should apply to determining overseas income as apply under the international maintenance arrangements. Extra time allowances There is to be some rationalisation of the extra time currently allowed by the regulations (for example, 90 days instead of 28 days) for various processes where one parent is a resident of a reciprocating jurisdiction. This extra time is sometimes allowed to a parent and sometimes to the Registrar, recognising the delays involved in some international communications and the need to seek information from an overseas authority. The provisions in question should allow extra time where necessary for an international maintenance arrangement to work efficiently and fairly, but not otherwise. The processes should not be slowed down and one parent's appeal rights deferred unnecessarily. The extra time allowances that are necessary under international maintenance arrangements should also be available in relation to payees who are residents of a reciprocating jurisdiction but covered by the purely domestic Australian child support provisions. The same time allowances should apply if one of the parents is overseas, regardless of whether the case is covered by international or domestic provisions. 7

Deemed refusal provisions Currently in the overseas regulations, there are several provisions deeming the Registrar to have refused to do certain things after a certain period. In all but one case, there are no equivalent domestic provisions. To eliminate this inconsistency, these deemed refusal provisions are to be removed (except in the one common case - section 91, relating to considering applications for extensions of time for lodging objections). The provisions are also undesirable in that they could prevent the Registrar from making an appropriate decision after the relevant period. Furthermore, the deemed refusals were originally to allow overseas authorities to object to decisions of the Registrar. This is in fact unnecessary in that such representations work effectively at present on an informal basis. Date liability first becomes enforceable The date from which an overseas maintenance liability first becomes enforceable is being made consistent with domestic cases - on the day on which the Registrar received the application for registration (instead of on the day of the registration itself). Application of low-income non-enforcement period to overseas maintenance liabilities The existing section 37B of the Child Support (Registration and Collection) Act 1988 provides for the non-enforcement of certain registered maintenance liabilities during a period of low income for the payer. The section is being amended to make it clear that it applies to overseas liabilities. Access to court If the Registrar refuses to accept a payee's application for child support administrative assessment, the payee can apply to a court for a declaration that he or she is entitled to an assessment. An amendment will provide that the court may also make the declaration in respect of a payer who is a resident of a reciprocating jurisdiction. Similarly, a payer may apply to a court for a declaration that the payee is not entitled to an assessment of child support payable by the payer. A further amendment will provide that a payer who is a resident of a reciprocating jurisdiction may also apply for such a declaration. References to New Zealand Agreement The overseas child support provisions currently refer in places to the treaty between Australia and New Zealand, or to specific decisions or articles under that treaty. In relocating those provisions, there is no specific mention of that treaty but provision instead for the regulations to prescribe a treaty, decision or article for the purposes of each relevant provision. This is to provide for any further treaties to be accommodated in the same way as the current one with New Zealand. 8

Family law minor or consequential amendments Presumptions of parentage The Family Law Act is being amended to insert a separate provision to establish a presumption of parentage from a finding of a court in a reciprocating jurisdiction or in a convention country. Parentage testing Amendments will move the main provisions concerning parentage testing for international maintenance cases from the Family Law Regulations 1984 to be with related provisions in the principal Act. The provisions allow Australia to carry out some of its obligations under international maintenance arrangements. This is done by enabling the Secretary of the Attorney-General's Department to initiate or continue legal proceedings for parentage testing, by determining who should bear the costs in such proceedings, and by providing for the admissibility of certain evidence in such proceedings. Parentage testing regulations The regulation-making power relating to parentage testing in international maintenance arrangements is to be retained in section 69ZD of the Family Law Act, and the list of agreements expanded to include several new agreements. Effect of Australia-New Zealand Agreement on court's jurisdiction The Australia-New Zealand Agreement sets out certain jurisdictional rules about making and varying child support and spousal maintenance liabilities. A new provision will make it clear that the court's jurisdiction to make or vary orders, assessments or agreements is limited in those circumstances where the person seeking payment habitually resides in New Zealand. Regulations relating to the agreement with the USA A new section is also being inserted to provide a regulation-making power in relation to the performance of Australia's obligations under a maintenance agreement between Australia and the United States of America. Application of Privacy Act 1988 The Privacy Act 1988 will apply to the new provisions proposed by this Schedule that relate to the handling of personal information. In particular, if the Registrar is permitted to disclose information to an overseas authority, the authority may use or disclose that information only for the purposes for which it was disclosed to the authority. 9

Child support definitions Note that terms that are defined in the Registration and Collection Act also apply in the Assessment Act (see section 6 of the Assessment Act). Explanation of changes Rather than being accommodated in one or more discrete portions of the principal child support legislation, the child support overseas provisions are being incorporated in the various substantive provisions of the principal legislation to which they relate. Accordingly, the relocated provisions will be scattered throughout the legislation, along with the policy improvements and rationalisations mentioned above. What follows is a broad explanation of the basis for each of the items in this Schedule - ie, whether each item is a simple relocation of a particular regulation or makes a policy change (or a combination of the two), whether it is consequential to a relocation or policy change (or both) made by another item in this Schedule, or whether it is generally consequential to this exercise to accommodate the overseas provisions within the structure of the principal legislation. Assessment Act amendments Items 1 to 47 amend the Assessment Act. Item 2 gives effect to the policy change discussed above: preventing dual liabilities and repeated new liabilities. Item 3 and new subsection 12(3A), inserted by item 4, give effect to policy changes discussed above: one parent to reside in Australia and applications from overseas and role of overseas authority. New subsection 12(3B), also inserted by item 4, gives effect to the policy change discussed above: meaning of `reciprocating jurisdiction'. New subsection 12(5) of the Assessment Act, inserted by item 5, relocates Assessment Overseas Regulation 6 into the Assessment Act. New subsection 12(6), inserted by the same item, gives effect to the policy change discussed above: one parent to reside in Australia. Items 6 and 7 relocate Assessment Overseas Regulation 4 into the Assessment Act. Items 8 and 9 relocate Assessment Overseas Regulation 11 into the Assessment Act, incorporating the policy change discussed above: one parent to reside in Australia. 10

Item 10 and new subsection 25(3) of the Assessment Act, inserted by item 11, relocate Assessment Overseas Regulation 14 into the Assessment Act, incorporating the policy change discussed above: applications from overseas and role of overseas authority. New subsection 25(4), also inserted by item 11, gives effect to the policy change discussed above: applications from overseas and role of overseas authority. New subsections 25(5) and (6), inserted by the same item, partially relocates Assessment Overseas Regulation 13 into the Assessment Act, incorporating the policy change discussed above: applications from overseas and role of overseas authority. The remainder of the regulation will be re-made in a new regulation. Item 12 and new subsections 25A(3) and (4) of the Assessment Act, inserted by item 13, give effect to the policy change discussed above: applications from overseas and role of overseas authority. New subsection 25A(5), inserted by the same item, partially relocates Assessment Overseas Regulation 13 into the Assessment Act, incorporating the policy change discussed above: applications from overseas and role of overseas authority. The remainder of the regulation will be re-made in a new regulation. New section 30A of the Assessment Act, inserted by item 15, gives effect to the policy change discussed above: meaning of `reciprocating jurisdiction'. New section 30B, inserted by the same item, gives effect to the policy change discussed above: preventing dual liabilities and repeated new liabilities. Item 14 is consequential to those policy changes. Item 16 relocates Assessment Overseas Regulation 15 into the Assessment Act. Item 18 relocates Assessment Overseas Regulation 16 into the Assessment Act. Item 20 relocates Assessment Overseas Regulation 17 into the Assessment Act, incorporating a technical amendment clarifying the meaning of the original (substituted) provision. Item 21 relocates most of Part 3 of the Assessment Overseas Regulations (regulations 23 and 25 to 27) into the Assessment Act, incorporating the policy change discussed above: overseas income. Items 1, 17, 19, 22, 23, 24, 25, 26 and 27 make amendments consequential to that relocation and policy change. Items 22 to 27 are also generally consequential to this exercise to accommodate the overseas provisions within the structure of the principal legislation. Items 28 and 29 give effect to the policy change discussed above: child support agreements. Item 30 gives effect to policy changes discussed above: one parent to reside in Australia and child support agreements. 11

Item 31 is consequential to the policy change discussed above: applications from overseas and role of overseas authority. Item 32 gives effect to policy changes discussed above: child support agreements and extra time allowances. Item 33 relocates Assessment Overseas Regulation 18 into the Assessment Act. Items 34 and 35 give effect to the policy change discussed above: extra time allowances. Items 36 and 37 give effect to the policy change discussed above: access to court. Item 38 relocates Assessment Overseas Regulation 7 into the Assessment Act. Item 39 relocates Assessment Overseas Regulation 29 into the Assessment Act, incorporating the policy change discussed above: references to New Zealand Agreement. Item 40 gives effect to the policy change discussed above: applications from overseas and role of overseas authority. Items 41 and 42 give effect to the policy change discussed above: preventing dual liabilities and repeated new liabilities. New section 162A of the Assessment Act, inserted by item 45, relocates Assessment Overseas Regulation 24 into the Assessment Act and is also generally consequential to this exercise to accommodate the overseas provisions within the structure of the principal legislation. Items 43 and 44 are consequential to that item. New section 162B, also inserted by item 45, partially relocates Assessment Overseas Regulation 22 into the Assessment Act. The remainder of the regulation will be re-made in a new regulation. Items 46 and 47 are generally consequential to this exercise to accommodate the overseas provisions within the structure of the principal legislation. Registration and Collection Act amendments Items 48 to 104 amend the Registration and Collection Act. Items 48, 49, 52 and 53 relocate definitions from Registration and Collection Overseas Regulation 5 into the Registration and Collection Act. Items 50 and 51 are generally consequential to this exercise to accommodate the overseas provisions within the structure of the principal legislation. 12

Item 54 relocates Registration and Collection Overseas Regulation 6 into the Registration and Collection Act. Item 55 relocates Registration and Collection Overseas Regulation 7 into the Registration and Collection Act. Items 56 and 57 relocate a definition from Registration and Collection Overseas Regulation 5 and also regulation 11 into the Registration and Collection Act. Items 58 and 59 are generally consequential to this exercise to accommodate the overseas provisions within the structure of the principal legislation. New paragraphs (da) and (db) of the definition of `terminating event', inserted by item 60, give effect to the policy change discussed above: one parent to reside in Australia. New paragraph (dc) of the same definition, inserted by the same item, gives effect to policy changes discussed above: one parent to reside in Australia and applications from overseas and role of overseas authority. New paragraph (dd) of the same definition, inserted by the same item, gives effect to the policy change discussed above: meaning of `reciprocating jurisdiction'. Items 61 and 62 relocate Registration and Collection Overseas Regulation 4 into the Registration and Collection Act. Item 63 relocates Registration and Collection Overseas Regulation 11 into the Registration and Collection Act, incorporating the policy change discussed above: references to New Zealand Agreement. Item 64 is consequential to that relocation and policy change. Item 65 relocates Registration and Collection Overseas Regulation 19 into the Registration and Collection Act. Item 66 relocates subregulation 10(4) of the Registration and Collection Overseas Regulations into the Registration and Collection Act. New subsections 25(1A) and (1B) of the Registration and Collection Act, inserted by item 68, relocate Registration and Collection Overseas Regulation 13 into the Registration and Collection Act, incorporating the policy change discussed above: applications from overseas and role of overseas authority. New subsections 25(1C) and (1D), inserted by the same item, give effect to policy changes discussed above: applications from overseas and role of overseas authority and preventing dual liabilities and repeated new liabilities. Items 67, 69 and 71 are consequential to the insertion of new subsection 25(1C). 13

New subsection 25(2A) of the Registration and Collection Act, inserted by item 70, relocates subregulations 10(1) and 12(1) of the Registration and Collection Overseas Regulations into the Registration and Collection Act. New subsection 25(2B), inserted by the same item, relocates subregulation 12(2) of the Registration and Collection Overseas Regulations into the Registration and Collection Act. New subsections 25(2C) and (2D), inserted by the same item, give effect to the policy change discussed above: preventing dual liabilities and repeated new liabilities. New section 25A of the Registration and Collection Act, inserted by item 72, relocates Registration and Collection Overseas Regulation 22 into the Registration and Collection Act, incorporating the policy change discussed above: references to New Zealand Agreement. New section 25B, inserted by the same item, relocates Registration and Collection Overseas Regulation 23 into the Registration and Collection Act. New section 25C, inserted by the same item, gives effect to the policy change discussed above: one parent to reside in Australia. Item 73 relocates Registration and Collection Overseas Regulation 14 into the Registration and Collection Act. New paragraphs 28(1)(d) and (e) of the Registration and Collection Act, inserted by item 74, relocate Registration and Collection Overseas Regulation 15 into the Registration and Collection Act, incorporating the policy change discussed above: date liability first becomes enforceable. New subsection 28(2), inserted by the same item, gives effect to the policy change discussed above: preventing dual liabilities and repeated new liabilities. Item 75 relocates Registration and Collection Overseas Regulation 16 into the Registration and Collection Act. Item 76 gives effect to the policy change discussed above: preventing dual liabilities and repeated new liabilities. Item 77 relocates Registration and Collection Overseas Regulation 31 into the Registration and Collection Act, incorporating policy changes discussed above: meaning of `reciprocating jurisdiction' and enforcement overseas without payee application. The new provision (section 30A) includes a clarification that a request under new subsection 30A(2) (by the Registrar to an overseas authority of a reciprocating jurisdiction to have a liability enforced in the jurisdiction) is not a legislative instrument for the purposes of the Legislative Instruments Act 2003. Item 78 makes a minor technical amendment to repeal a superfluous note. Item 79 relocates Registration and Collection Overseas Regulation 19 into the Registration and Collection Act. Items 80, 82 and 84 relocate subregulations 10(1) and (2) of the Registration and Collection Overseas Regulations into the Registration and Collection Act. 14

Item 81 gives effect to the policy change discussed above: application of low-income non-enforcement period to overseas maintenance liabilities. Item 83 relocates Registration and Collection Overseas Regulation 21 into the Registration and Collection Act. Items 85 and 86 relocates Registration and Collection Overseas Regulation 25 into the Registration and Collection Act. Item 87 relocates Registration and Collection Overseas Regulation 26 into the Registration and Collection Act. Item 88 relocates Registration and Collection Overseas Regulation 39 into the Registration and Collection Act. New subsection 81(3) of the Registration and Collection Act, inserted by item 89 relocates Registration and Collection Overseas Regulation 40 into the Registration and Collection Act. The other new subsections inserted by the item relocate Registration and Collection Overseas Regulations 41 and 42 into the Registration and Collection Act, incorporating the policy change discussed above: references to New Zealand Agreement. Items 90, 91, 92, 93, 94 and 95 relocate Registration and Collection Overseas Regulation 38 into the Registration and Collection Act. Item 96 relocates subregulations 10(1) and (2) of the Registration and Collection Overseas Regulations into the Registration and Collection Act, incorporating the policy change discussed above: extra time allowances. Items 97 and 99 relocate subregulations 10(1) and (2) of the Registration and Collection Overseas Regulations into the Registration and Collection Act. Items 98 and 100 are consequential to those relocations. New section 121A of the Registration and Collection Act, inserted by item 102, relocates Registration and Collection Overseas Regulation 8 into the Registration and Collection Act and is also generally consequential to this exercise to accommodate the overseas provisions within the structure of the principal legislation. Item 101 is consequential to that item. New section 121B, also inserted by item 102, relocates Registration and Collection Overseas Regulation 9 into the Registration and Collection Act. New section 121C of the Registration and Collection Act, inserted by the same item, partially relocates Registration and Collection Overseas Regulation 28 into the Registration and Collection Act. The remainder of the regulation will be re-made in a new regulation. Items 103 and 104 are generally consequential to this exercise to accommodate the overseas provisions within the structure of the principal legislation. 15

Child support offence provisions Several items in this Schedule (items 43, 44, 65, 79 and 101) amend child support provisions that provide for an offence. In each case, the amendment is to make it clear that the existing offence does not apply in connection with a liability under an international maintenance arrangement. Therefore, the underlying rationale for the offence, and its level, is not affected by the amendments. Furthermore, although the amendments technically appear to narrow the application of the offence to this extent, there is no practical narrowing because the circumstances in which the offence may have applied previously were in fact covered by the overseas related regulations, which provided no offences. In particular, the offences provided by the provisions being amended by these items are all offences of strict liability. There is no alteration by these amendments to the existing basis for those strict liability offences. Family Law Act amendments Items 105 to 116 amend the Family Law Act. Items 105, 106, 107 and 108 are consequential amendments arising from the insertion of new section 111AA into the Family Law Act, discussed above: effect of Australia-New Zealand Agreement on court's jurisdiction. Item 109 makes clear that the presumption of parentage in new subsection 69S(1) applies to a finding by a court in Australia. Item 110 inserts new subsection 69S(1A) to establish a presumption of parentage arising from a finding by a court in a reciprocating jurisdiction or a Convention country. Item 111 gives effect to the policy discussed above: parentage testing, by adding a new section 69XA. The provisions in new section 69XA were formerly in subregulations 39B(5) to (8) of the Family Law Regulations 1984. The reference in new section 69XA, and in new section 117AB (inserted by item 115), to Schedule 4A is a reference to a Schedule to regulations that is yet to be made. The Schedule will contain a list of the countries that are parties to the 1973 Hague Convention on the Recognition and Enforcement of Decisions relating to Maintenance Obligations. Item 112 expands the list of agreements or treaties to which Australia is a party, and for which parentage testing regulations may be made. Item 113 is a consequential amendment of the kind made by items 105 to 108. 16

Item 114 inserts new section 111AA to give effect to the policy discussed above: Effect of Australia-New Zealand Agreement on court's jurisdiction. Item 114 also inserts new section 111AB to provide a regulation-making power in relation to the performance of Australia's obligations under a maintenance agreement between Australia and the United States of America. Item 115 inserts new section 117AB to prevent a court making an order for security for costs in maintenance proceedings involving a country that is a party to the 1973 Hague Convention on the Recognition and Enforcement of Decisions relating to Maintenance Obligations. Item 116 repeals subsection 124A(3) to remove the power to make regulations that are inconsistent with the Act. The reasons that the power was originally inserted are explained in Background. Commencement The items in this Schedule will commence prospectively, 28 days after Royal Assent, so that the regulations that will be necessary to give effect to the new rules may be made as soon as this Bill is enacted, and ready to commence when these amendments commence. 17

Schedule 2 - Amendments relating to access to courts and review process Summary This Schedule makes amendments to improve equity between parents in access to court and to streamline certain review processes. Background The Assessment Act provides a system of internal reconsideration (`objections') for decisions made by the Child Support Registrar and also deals with the jurisdiction of courts in child support matters (see Parts 6B and 7). As a general principle, a person who is aggrieved by a decision must use the objection procedure under Part 6B before having access to a court or the Administrative Appeals Tribunal. However, in relation to certain decisions, if one of the parties to a child support assessment has lodged an objection in relation to a matter, either party may appeal to court in the matter, not just the one who lodged an objection. Nevertheless, there are still some inequities in the current system, whereby one party affected by a decision may have a lesser right of access to a court, especially in cases of departure under Part 6A from the usual administrative child support assessment and disputed parentage. This streamlining initiative is largely to make the system of court access fairer. Certain minor refinements to the objection procedure are also being made. The amendments fall into several categories. Review of departure determinations Part 6A allows the Registrar to determine that the normal administrative assessment provisions of the Assessment Act are to be departed from in individual cases. This may happen on the Registrar's own initiative or on application by either the liable parent or the carer entitled to child support. As provided by paragraph 98X(1)(d), a person aggrieved by a decision to make, or refuse to make, a departure determination under Part 6A may lodge an objection with the Registrar. Section 116 generally allows an application also to be made to a court with appropriate jurisdiction, although, as stipulated by subsection 116(1A), such an application may not be made in relation to the making of, or refusal to make, a departure determination under Part 6A unless an objection has been lodged under section 98X and the Registrar has finalised the objection. 18

This Schedule will now make optional the requirement for an objection to have been lodged before a person has access to the court. Thus, a person (either party) may choose between the two review options in relation to departure determinations. If one party were to lodge an objection and the other party were to apply to the court, or if one of the parties both lodges an objection and applies to court at the same time in respect of the same matter, the court will determine whether the Registrar should consider the objection before the court determines the primary application. The objection procedure includes, in section 98ZB, a requirement for the Registrar to serve a copy of the grounds of objection on the other party affected by the decision. In the case of an objection to the making of, or to the refusal to make, a Part 6A departure determination, the Registrar will now not be subject to this requirement if satisfied that the other party's rights will not be affected by the decision in relation to the objection. This is likely to arise in relation to representations that purport to be `objections' but do not in fact raise any new issues, to the extent that they may not in fact be valid objections. Some of these representations are essentially arguments about whether there is sufficient evidence to support a particular decision. Some are essentially reiterations of previous objections. Nevertheless, these representations are handled as objections so that, once finalised, there is access to court for those who want to pursue the matter. Relaxing the requirement to send copies, when it is clear that no purpose would be served by that, will speed up the process so that this court access is available as soon as possible. Even though an objection may have been lodged, child support remains payable under the disputed assessment. Although section 140 allows an application to be made to a court staying the operation of the assessment if a proceeding has been instituted in court, or if a Part 6A departure process is under way, there is nothing to allow a similar staying application if an objection has been lodged under section 98X to a decision to make, or to refuse to make, a departure determination under Part 6A. This is now to be provided by allowing an application to be made to the court to stay the operation of the assessment in relation to an objection. 19

Equal court access Eliminating multiple objections There are several provisions in the Assessment Act (other than in relation to departure determinations under Part 6A) that produce inequitable access to court between the two parties to a child support assessment. The general thrust of the amendments in this area is to provide that an objection made by one of the parties opens up access to court for either party. This will effectively eliminate the possibility of multiple objections for one issue. There should be one objection process, whoever initiates it, and then the matter should go to court. For example, section 106 of the Assessment Act currently provides that, if the Registrar refuses to accept a carer application for administrative assessment of child support, the carer applicant may apply to court, subject to the carer applicant lodging an objection and it being finalised. However, a situation could arise in which: · a carer applies for administrative assessment under section 25; · the Registrar accepts the application under subsection 30(1); · the liable parent objects under paragraph 98X(1)(a); and · the Registrar allows the objection under section 98ZC with the result that the carer application is refused. In this case, the carer applicant has access to court under section 106, but must first lodge an objection, even though the objection process has already been exhausted by the liable parent. It is to be provided here that the carer applicant should have immediate access to court. Similarly, section 106A currently provides that, if the Registrar refuses to accept a liable parent application for administrative assessment of child support, the liable parent applicant may apply to court, subject to the liable parent applicant lodging an objection and it being finalised. However, the following situation could arise: · a liable parent applies for administrative assessment under section 25A; · the Registrar accepts the application under subsection 30(1); · the carer objects under paragraph 98X(1)(a); and · the Registrar allows the objection under section 98ZC with the result that the liable parent application is refused. The liable parent applicant has access to court under section 106A, but must first lodge an objection, even though the objection process has already been exhausted by the carer. It is to be provided here that the liable parent applicant should have immediate access to court. 20

Finally, section 107 provides that, if the Registrar accepts a carer application for administrative assessment of child support, the liable parent (`the person from whom the application sought payment of child support') may apply to court, subject to the liable parent lodging an objection and it being finalised. Similar amendments are being made to section 107 as to sections 106 and 106A. Disputed parentage There is also inequity in court access when parentage is under dispute. If the Registrar accepts a carer application for administrative assessment of child support, and if the liable parent claims not to be a parent of the child concerned, the liable parent may make immediate application to a court under section 107 to challenge the acceptance decision. In fact, because of subsections 98X(2) and 107(1B), this person cannot lodge an objection. Conversely, if the Registrar refuses to accept the carer application, not being satisfied that the person from whom the application sought payment of child support is a parent of the child, an objection must be lodged by the carer and finalised before the carer may apply to a court under section 106 to challenge the refusal decision. This is because of subsection 106(1A). Similarly, it is feasible that a liable parent applicant whose application is refused because the Registrar is not satisfied that the applicant is a parent of the child may want to assert parentage. In this case, immediate access to court under section 106A is to be provided, rather than an obligation to lodge an objection, as currently exists in subsection 106A(1A). Furthermore, it is possible that a liable parent applicant whose application is accepted (whether outright or after review) may later have reason to doubt the fact of parenthood. In this case, the only way to terminate the child support assessment that was initiated by the liable parent personally is to seek review. Whereas it is possible for the liable parent to lodge an objection under section 98X, there is no ensuing provision at all to provide for court access. This is a particular problem given that an application to court, and not an objection, is the proper process in cases of disputed parentage. Accordingly, a new section will provide this access to court. The overall aim here is to allow a party access to a court if the issue is that the party, or the other party (as relevant), is, or is not (as relevant), a parent of the child concerned. Manner of applying for extension of time to lodge objection Objections must be lodged within a set time frame (see section 98Z). However, section 98ZD allows an application for an extension of time in which to lodge an objection. This application must be in writing. This Schedule will provide that the Registrar may accept such an application in a manner determined by the Registrar, including orally. 21

Allow application for extension of time to object to decision to be lodged after objection Section 98ZD of the Assessment Act allows a person who wishes to object to a decision of the Registrar, despite the period for lodging an objection having passed, to lodge the objection together with an application for an extension of time for the lodgement. In practice, people often lodge objections without realising that the period has passed and then have to be reminded to apply for the extension. The requirements in this process are to be eased so that an application for an extension of time is valid even if lodged after the objection itself. The application for extension will then be considered under the current provisions. Explanation of changes Items 1, 2 and 3 make amendments that are consequential to the measure discussed above: eliminating multiple objections. Item 4 makes an amendment that is consequential to the measures discussed above: eliminating multiple objections and disputed parentage. Items 5, 6, 7, 18, 22 and 23 make amendments that are consequential to the measure discussed above: disputed parentage. Items 8, 10 and 19 make amendments that are consequential to the measure discussed above: review of departure determinations. Item 9 makes the amendment, relating to serving a copy of the grounds of objection, discussed above in relation to: review of departure determinations. Item 11 makes the amendment, relating to a court determining whether an objection should be considered before an application to the court, discussed above in relation to: review of departure determinations. Item 12 makes the amendment discussed above: allow application for extension of time to object to decision to be lodged after objection. Item 13 makes the amendment discussed above: manner of applying for extension of time to lodge objection. New subsection 106(1A), inserted by item 14, new subsection 106A(1A), inserted by item 15 and new subsection 107(1A), inserted by item 16, make the amendments discussed above: eliminating multiple objections. New subsection 106(1B), inserted by item 14, and new subsection 106A(1B), inserted by item 15, make the amendments discussed above: disputed parentage. 22

Item 17 inserts new section 107A, primarily to reflect the measure discussed above: disputed parentage. However, it also reflects the measure discussed above: review of departure determinations. Items 20 and 21 make the amendments, relating to choice between objection and court review, discussed above in relation to: review of departure determinations. Commencement The items in this Schedule will commence on Royal Assent. 23

Schedule 3 - Miscellaneous amendments Summary This Schedule makes various child support minor policy refinements and technical corrections. Background The minor policy measures included in this Schedule are described separately below. Inclusion in child support assessment, after initial assessment, of a `relevant dependent child' A payer's assessed liability for a child may be lower if he or she also has a `relevant dependent child' (eg, a child of a current relationship). Subsection 39(3) of the Assessment Act addresses the situation in which the Registrar finds out, after an assessment comes into force, that the payer has a relevant dependent child who was not taken into account in the assessment. There is a technical problem with one of the backdating rules in this provision (paragraph (d)). The default rule in subsection 39(3) is that the payer is taken to have had the relevant dependent child from the day the Registrar found out that the child is a relevant dependent child (see paragraph (e)). However, there are two backdating rules. The backdating rule provided by paragraph (d) allows backdating to the day the notice of assessment was given by the Registrar, as long as the Registrar found out, within 28 days after the notice was given, about the child being a relevant dependent child. This rule does not operate correctly. In particular, the notice of assessment being received by the payer (which may well be the first he or she knows about the child support liability) may be considerably later than the start of the liability (which is when the application for assessment was made). The payer should have reflected in his or her assessment, from the start of the liability, the responsibility of having the relevant dependent child. This is being corrected. 24

Notices of assessment - information given about other children, and information given in child support agreement or court order cases Section 76 of the Assessment Act requires the Registrar to give written notice of any administrative assessment made to the parents involved. It also sets down the information that must be included in the notice. This is designed to give the parent concerned a full appreciation of the basis of the assessment that affects him or her (and so inform any decision to object, or respond to an objection). Accordingly, the information required to be included in the notice may vary between specific situations set out in subsection (2). However, section 76 attempts to balance the need to give full information against the need to preserve privacy - ie, only necessary information should be given. Information given about other children Several paragraphs in subsection 76(2) require some clarification and refinement to ensure that this balance is achieved in relation to information given about children other than those for whom assessments are made (eg, a child of a current relationship). This is being done by limiting the information that must be notified in each specific situation strictly to those matters relevant to the legislative provisions that apply to those situations. Information given in child support agreement cases A refinement is also being made to the notice requirements when a child support agreement or a court order modifies the administrative assessment. From a privacy viewpoint, the only matters that should be notified are those that informed the assessment, ie, those not overridden by the agreement or court order. Yet section 76 requires that all of the specified matters be notified. This is being corrected. Allow payer to object to a decision to refuse a credit under section 71C of the Registration and Collection Act The Child Support Legislation Amendment Act 2001 amended paragraph 84A(1)(a) of the Registration and Collection Act. The purpose of the amendment was to allow a child support payee to object to the Registrar crediting, under section 71C, an amount against the liability of a payer, as is currently allowed for amounts credited under related provisions. The amendment was consequential to the insertion of section 71C by the Child Support Legislation Amendment Act 1998. The 1998 and 2001 amendments should also have extended the same objection right to the payer, should the Registrar refuse to credit such an amount. This is now being corrected. 25

Rental property loss For each parent, the child support income amount includes a component known as the parent's rental property loss. This is the amount (if any) by which the parent's allowable deductions under the Income Tax Assessment Act 1997 in respect of rental property exceed the parent's rental property income (other than such income derived as a member of a partnership). Thus, any reduction in taxable income for rental property losses is generally added back into income for child support purposes. The Australian Taxation Office changed the way in which rental property losses are reported by taxpayers from the 2002-03 income year. The change was to introduce a low value pool deduction. Depreciation (relating to a rental property) that has declined in value to below $1000 may now be claimed as part of a pool along with other unrelated deductions such as education expenses and work related expenses. The value of the pool deduction is given as a separate item in tax returns, and it is not possible to isolate the rental property component from other components of the pool deduction. Accordingly, rental property loss amounts claimed through a pool may not be readily added back into income for child support purposes. The problem is being addressed by excluding such amounts from the rental property loss - they will no longer form part of the child support income amount, although the more clearly identifiable rental property components will continue to be treated as they have been. However, this is to happen by regulation, because of the potential for change to the taxation arrangements. Accordingly, the only change at present will be to insert a regulation-making provision into the child support legislation - regulations will be made soon after. Recovery of overpayments between payers and payees Amendments are being made to clarify the effect of section 143 of the Assessment Act, as endorsed by the full Family Court in a recent case (Child Support Registrar and Z and T (21 March 2002)). Although the court confirmed the intended effect of the provision, it was felt that some clarification should be provided in the provision. The intention is that any amount of child support paid by a payer who is found not to be the parent of the child and so not liable to pay that amount should be recovered, in court, by the payer from the payee, not from the Registrar. This effect is being clarified, as suggested by the court. 26

Secrecy amendments - disclosure to ministers, and threats of self-harm Disclosure to ministers A refinement is being made to the child support secrecy provisions to allow the disclosure to portfolio ministers of protected information about child support clients that is necessary to finalise correspondence and similar tasks for those clients. New provisions are being inserted to the effect that there is no contravention of the offence in the secrecy provisions in disclosing protected information to a minister if the person to whom the protected information relates has expressly or impliedly authorised the communication of such information to the minister. A minister in this measure includes a parliamentary secretary, as envisaged by section 4 of the Ministers of State Act 1952. Threats of self-harm The child support secrecy provisions create an offence if protected information concerning a person is communicated to another person, subject to some specified exceptions. Under one of the exceptions, the Registrar, or a person authorised by the Registrar, may communicate protected information to a law enforcement officer if: · a threat has been made against a person; and · it is apparent that an offence may be, or may have been, committed; and · the purpose of communicating the information is for preventing, investigating or prosecuting such an offence. Self-harm does not constitute an offence, so threats of self-harm cannot be reported to the police under this exception. This Schedule extends the exception so that threats of self-harm that become apparent during contacts with Child Support Agency staff may be reported to police. Recovering lesser amounts of child support related debts from third parties Section 72A of the Registration and Collection Act gives the Registrar a discretion to require a person who owes money to a child support debtor to pay an amount to the Registrar in whole or partial satisfaction of the debt. 27

However, if the Registrar chooses to exercise this discretion, there is little choice about the amount that may be required to be paid. In essence, the Registrar must require that an amount be paid that is equal to the whole debt or the whole amount due by the third party to the debtor (whichever is the smaller amount). In fact, there are some circumstances in which the Registrar may wish to require a lesser amount to be paid - ie, less than the whole debt or less than the whole amount due to the debtor by the third party. For example, if a satisfactory arrangement for the repayment of the debt were to be agreed between the debtor and the Registrar, it may not be necessary to use the section 72A recovery mechanism to the full extent possible. Nor may that be desirable if the debtor relies on the money in question, eg, in a bank account, as the sole means of supporting himself or herself. Accordingly, the Registrar will now be able to require the payment of an amount that may be less than the whole debt or less than the whole amount due to the debtor by the third party. Duty of payee to notify change of name or address Subsection 111(2) of the Registration and Collection Act obliges the payer of an enforceable maintenance liability to notify the Registrar of a change to his or her name or address. This Schedule imposes the same obligation on payees so that the liability can be properly administered and incorrect payments avoided. Application of certain amounts to child support debts Schedule 5 to the Child Support Legislation Amendment Act 2001 repealed section 72 of the Registration and Collection Act and substituted a new section 72. The purpose of this, along with the other amendments made by Schedule 5, was to reflect the fact that the child support function has moved to the Family and Community Services portfolio and that, accordingly, the Child Support Registrar is no longer the Commissioner of Taxation. No substantive change was intended to be made to the operation of section 72 - only the portfolio change was to be reflected, along with necessary minor changes to reflect the current taxation arrangements. However, an unintended substantive change was in fact made, which is now being corrected. The correction is to resume the former capacity in section 72 to recover from a person's tax refund any debt `due to the Commonwealth by the person under this Act' (eg, a debt owed by a payee), and not just a `child support debt' (ie, only a payer debt), as is provided by the erroneously amended section 72. 28

Precluding family tax benefit advance for child support debtor The Child Support Legislation Amendment Act 2001 included amendments to allow child support debts to be recovered from the debtor's family tax benefit (FTB). New section 227 of the A New Tax System (Family Assistance) (Administration) Act 1999 and new section 72AB of the Registration and Collection Act allow this recovery from the debtor's FTB by instalment or FTB for a past period. However, none of the amendments allow similar deductions from an FTB advance, nor is an FTB advance precluded for a child support debtor. This is a weakness in the amendments because a debtor could undermine the debt recovery process by choosing to reduce his or her FTB by instalment entitlement into an FTB advance. Accordingly, a debtor is to be prevented from doing this by making an advance unavailable in these circumstances. This is equivalent to the current situation for people who owe a social security or family assistance debt. However, a person who has repaid a debt he or she may have had at the start of an FTB advance `standard advance period' (which would have precluded the advance at that point) should be able to get an advance for the remaining period. It is proposed to make this extra refinement. Technical amendments There are several technical amendments made by this Schedule, described in more detail below. Explanation of changes Assessment Act amendments Items 1, 2 and 3 give effect to the policy refinement discussed above: precluding family tax benefit advance for child support debtor. Item 4 makes a technical amendment. Section 42 of the Assessment Act provides for a cap on child support based on the `yearly equivalent of the relevant AWE amount' for the child support period. The highlighted term is defined in section 5, in relation to a child support period, as meaning 52 times the relevant AWE amount in relation to the child support period. The equivalent provision in relation to the entitled carer's income amount (section 46) is based on the `yearly equivalent of the EAWE amount' for the child support period. However, by contrast with section 42, the operative term in section 46 is not defined (although `EAWE amount' itself is defined in section 5). To ensure consistent treatment between the two related provisions, `yearly equivalent of the EAWE amount' should also be defined in section 5. It is being defined to mean, in relation to a child support period, 52 times the EAWE amount for the child support period. 29

Items 5 and 9 give effect to the policy refinement discussed above: rental property loss. The regulations that will be necessary to give effect to the new rules will be made as soon as this Bill is enacted, ready for when these amendments commence, 28 days after Royal Assent. Items 6 and 7 give effect to the policy refinement discussed above: inclusion in child support assessment, after initial assessment, of a `relevant dependent child'. Item 8 makes a technical amendment. Section 45A of the Assessment Act describes the entitled carer's `supplementary amount' for the purposes of the definition of the carer's `income amount' in section 45. One of the components of the supplementary amount is the carer's `exempt foreign income' (as mentioned in paragraph 45A(1)(a)). This in turn is defined in subsection 45A(2), but the subsection contains an editing error towards the end. It should refer to the total amount of the carer's relevant exempt income, reduced by certain losses and outgoings `incurred by the entitled carer [not liable parent] in deriving that exempt income'. Item 10 makes a technical amendment. The Child Support Legislation Amendment Act 2001 made an amendment to allow the modification to the basic formula for administrative assessment in shared or divided care cases to apply to eligible children who have turned 18, and not just those aged under 18 as currently provided. Another amendment in the same Act inserted a new section to make sure that the continuation of child support once a child has turned 18 is based on the assumption that the child is still 17 for the purposes of the administrative assessment provisions. In fact, the second amendment alone would have been sufficient to achieve the desired result. The first amendment is superfluous and is being undone to avoid confusion. This amendment will take effect, retrospectively, to override the superfluous amendment. No person will be adversely affected by this retrospective commencement. Item 11 makes a technical amendment. Section 56 of the Assessment Act provides that, for child support purposes, a person's taxable income is generally taken to be the taxable income last assessed before the affected administrative assessment is made. Any later amendment of that assessment is usually disregarded and the assessment already applied continues to apply. However, in certain cases generally connected with tax avoidance, etc, the amended assessment should apply. This is provided by subsection 56(3), which identifies the three cases in a rather lengthy passage that, although technically correct, is prone to being misread. The subsection is being redrafted in a clearer way to avoid misinterpretation. The regulations that currently prescribe provisions and circumstances for the purposes of the subsection will be re-made with the same effect as soon as this Bill is enacted, ready for when these amendments commence, 28 days after Royal Assent. 30

Item 12 makes a technical amendment. Part 5 of the Assessment Act provides for a person's child support income amount to be based on an estimate of taxable income in certain circumstances. The Child Support Legislation Amendment Act 1998 repealed and substituted a new section 60 in that Part. The effect of the new section is that a child support income amount can now be based on an election (ie, an estimate) only for the remaining days (after the election) in the child support period. That is, it can be so based only prospectively - the previous version of the provision had applied the estimate throughout the income year, including retrospectively. This deliberate change in approach was not followed through, however, in new subsection 60(2), which prevents a person from making such an election if an income amount order is in force in relation to any part of the child support period. This should in fact say `any part of the remaining [child support] period'. Items 13, 14, 15, 16 and 17 give effect to the policy refinement discussed above: notices of assessment - information given about other children. Item 18 gives effect to the policy refinement discussed above: notices of assessment - information given in child support agreement or court order cases. Item 19 makes a technical amendment. Included in Division 2 of Part 6A of the Assessment Act, dealing with departures initiated through an application from a liable parent or a carer entitled to child support, is a requirement for the Registrar to invite the other party to make a representation regarding the application (see subsection 98G(2)). Division 3 of Part 6A deals with departures initiated by the Registrar. Naturally, there is no application in this case, although the provisions are otherwise generally comparable between the two Divisions. Nevertheless, there is a mistake in the provision in Division 3 that is equivalent to subsection 98G(2). Subsection 98M(3) requires the Registrar to invite each party to the proceedings to make a representation regarding `the application'. Since there is no application, the provision should refer instead to `the summary'. This is the summary (mentioned in subsection 98M(2)) of the information that the Registrar used to form the view that the departure determination should be made. Item 20 makes a technical amendment. Section 98V, in Part 6A (departure determinations), was inserted into the Assessment Act by the Child Support Legislation Amendment Act 1998, as part of a wholesale repeal and substitution of Part 6A. This was to improve certain aspects of the departure process, particularly addressing concerns raised by a Joint Committee of the time, and in relation to Registrar initiated departure determinations. No explicit change was intended to be made in the substitution of new section 98V over the former provision (section 98M). The new section was substituted in essentially the same form, with certain minor drafting changes. Unfortunately, a minor but critical change was made by oversight - it was never intended. This is that the word `no' that was in the old section 98M was mistakenly left out of the replacement section 98V. This is being corrected. 31

Item 21 gives effect to the policy refinement discussed above: recovery of overpayments between payers and payees. Items 22 and 26 give effect to the policy refinement discussed above: secrecy amendments -threats of self-harm. Items 23 and 27 give effect to the policy refinement discussed above: secrecy amendments - disclosure to ministers. Registration and Collection Act amendments Item 24, and the amendment, appearing after item 32, to the note to section 84A, give effect to the policy refinement discussed above: allow payer to object to a decision to refuse a credit under section 71C of the Registration and Collection Act. Item 25 makes a technical amendment. The term `child support agreement' is defined in section 5 of the Assessment Act. However, this definition does not apply in the Registration and Collection Act, nor is the term defined in that Act itself, although the term is used in that Act and so needs a definition. Accordingly, an identical definition is being inserted into the Registration and Collection Act. Item 28 makes a technical amendment. Section 67 of the Registration and Collection Act imposes a penalty for late payment of child support debts. The amount of such a penalty is calculated with reference to the `relevant annual rate'. This is defined, somewhat loosely, in subsection 67(3) as the annual rate of the penalty for unpaid income tax for the time being specified in the Income Tax Assessment Act 1936. The relevant provision in that Act itself would appear to be the definition of the `base interest rate' in section 214A. That term in turn has the same meaning as in section 8AAD of the Taxation Administration Act 1953. However, the relevant annual rate mentioned in section 67 is actually supposed to link to the other term defined in section 8AAD - the `general interest charge rate' (see subsection 8AAD(1)). The definition of relevant annual rate in subsection 67(3) needs to be amended so that it has the same meaning as the general interest charge rate has in subsection 8AAD(1). Items 29 and 30 give effect to the policy refinement discussed above: application of certain amounts to child support debts. Items 31 and 32 give effect to the policy refinement discussed above: recovering lesser amounts of child support related debts from third parties. Item 33 gives effect to the policy refinement discussed above: duty of payee to notify change of name or address. 32

Child support offence provisions Four of these minor policy refinements are to provisions containing offences. None of these measures affects the underlying rationale for the offence and its level. Two of the measures (see items 22, 23, 26 and 27) are to the child support secrecy provisions, to allow disclosure of information to police in the event of a threat of self-harm, or to a minister if the person concerned expressly or impliedly authorises the disclosure. Therefore, people disclosing information in these circumstances will be protected from the application of the offence in the secrecy provisions. Section 72A of the Registration and Collection Act is also being amended (by items 31 and 32) to clarify that an amount that may be recovered from a third party, from money owed by that third party to a child support debtor, may be less than either the total debt or the total amount owed by the third party to the debtor. Failure to pay an amount under the section attracts an offence (of strict liability), which would also apply in relation to this lesser amount to be recovered. Accordingly, this amendment also does not affect the rationale for, and level of, the offence. Lastly, payees are to be included with payers in the ambit of the notification requirement imposed by section 111 of the Registration and Collection Act. Failure to notify attracts an offence (of strict liability). Accordingly, although the application of the offence in this case is being widened, it does not affect the rationale for, and level of, the offence. Strict liability is an appropriate basis for the offence as applied to payees, as it is to payers, because of: · the difficulty the prosecution would have in proving fault (especially knowledge or intention) in this case; · the fact that the offence is minor (a fine of $1000); and · the fact that the offence does not involve dishonesty or other serious imputation affecting the person's reputation. Commencement The items in this Schedule generally commence on Royal Assent. However, one (item 10) commences retrospectively, as described above. Also, items 5, 9 and 11 will commence prospectively, 28 days after Royal Assent, so that the regulations that will be necessary to give effect to the new rules may be made as soon as this Bill is enacted, and ready to commence when these amendments commence. 33

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