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He suggested that the CSA change its case selection procedures, to be more even-handed in its approach to the two parties.The Acting Commonwealth Ombudsman Mr Ron Brent said
We examined 34 cases where child support had been reassessed and in almost every case the amount that had to be paid increased. The CSA has prioritised cases that increase child support liabilities, whereas their advertising suggested targeting both payer and payee parents that is, that they would investigate both those parents suspected of understating their incomes in order to pay less and those understating their incomes to receive more
In practice, the majority of investigations targeted only those suspected of paying too little.
The report also calls attention to the intrusive nature of Capacity to pay investigations and that they have the potential to damage the relationship between parents, for example, when financial information about a new partner is requested unnecessarily.Mr Brent said
It is also important that investigations are carried out with sensitivity and without implying that all investigated parents are trying to avoid child support obligations.
While the Ombudsman recognised the need for the CSA to look more broadly at a persons total financial situation, the majority of cases examined were in fact people with legitimate taxation arrangements.
On the other hand it is important that the CSA deals appropriately with cases of deliberate fraud or evasion when it finds them.
The Ombudsman's office say:Secretary of the Shared Parenting Council said
The number of complaints we receive from Self Employed participants in the scheme is significant and the acting Ombudsman Mr Ron Brent might have taken this opportunity to go much further in his investigation with more cases and findings. In particular things like non compliance and breeches of privacy by the CSA in some cases, garnishee orders on the wrong organisation which has materially affected a self employed persons relationship with suppliers in other cases.
The bottom line is that deductions, legitimate for taxation reasons are not legitimate for the CSA assessment. The Ombudsman has quite correctly highlighted in Recommendation 7 key elements that will go someway to assisting Self Employed payers. This is a recommendation we stronly support and the CSA need to go much further in the list of items that have to be considered.
A number of Self Employed payers we are aware of, get locked into years of protracted investigations with the CSA because they do not have clear rules when they start up. Running a small business and being in the child support scheme is no small undertaking and where a new relationship is entered into and that partner is assisting in operating a cash poor start up company or business, the recipe for incorrect handling of transactions is high.
One of the answers, in our view is to produce a detailed FACT sheet of what can and cannot be deducted, detailed guide lines as to how income is to be treated, how pay book and tax payments are to be made, how payments to a new partner are made, impacts on new partner incomes, impacts around deductibility and very clear and precises rules as to how depreciation is to be treated is one option.
The other option is view the ATO rules as paramount and use the ATO tax return as the declared income. Self Employed payers have a range of unique issues that have to be dealt with as well as trying to re set up their lives after separation. The existing rules are confusing and do not align to the tax return.
Fathers 'stereotyped' by Child Support Agency
Paul Bibby WORKPLACE
August 26, 2010
SMH
THE government watchdog responsible for overseeing child support payments has been unfairly focusing on parents who do not pay enough while ignoring those who are getting too much, the Commonwealth Ombudsman says.
In a report that might not be well received by some single mothers, the acting Ombudsman, Ron Brent, found that the Child Support Agency had at times been unduly influenced by stereotypes about fathers not meeting their obligations.
He found that, as a result of this and other factors, the agency had ''not been even-handed'' in its role as an investigator.
Those required to make payments - usually fathers - were made the subject of rigorous investigations including their property holdings, tax minimisation arrangements and involvement in complex corporate structures.
The review found that on some occasions these investigations were intrusive and insensitive - assuming that fathers deliberately rather than accidentally mis-represented their ability to pay child support.
In a number of cases the financial records of a father's new partner were demanded without sufficient explanation as to why they were needed and what they would be used for.
At the same time there were ''very few investigations'' into those who received payments - usually mothers - to see whether they were getting too much.
''The CSA needs to change its case selection procedures, to be more even-handed in its approach to the two parties,'' Mr Brent said. ''It is also important that investigations are carried out with sensitivity and without implying that all investigated parents are trying to avoid child support obligations.
''I do not think that fathers have been victimised, but I can understand why they might have that impression.''
While greater balance was needed, Mr Brent said it was right that more attention be paid to fathers because they were more likely to have complex financial arrangements where errors were more common.
He also said that up until recently, government policy had in fact encouraged the agency to focus on fathers rather than mothers.
Elspeth McInnes, a policy adviser to the National Council for Single Mothers and Their Children, said she did not believe the Child Support Agency applied a gender filter to its investigations.
''I think the filter is the law,'' Dr McInnes said.
