Jail for CSA Debt?

The Australian - Focus Section 8-9 April, 2000

Attorney General Daryl Williams wants to jail more mums and dads who defy family law. But as John Stapleton reports, critics say it is the system that is at fault.

Once upon a time, Frank played professional sport and was married with two young sons. In 1987, his marriage broke down. He lost his children, his house, his furniture, all of which he left with his former wife because he thought it was the best thing to do. "I walked out with my bags," he recalls.

Orders for maintenance were made by the Family court at separation and these were collected through the Child Support Agency. Partially disabled by two accidents and unable to work since, Frank's only source of income is a parenting payment for his stepdaughter.

This month Frank (not his real name) lost his Family Court case to be excused from maintenance and back debt. "I couldn't understand why", he says. "It is not as if she never got anything out of me. She got everything. They have no compassion."

Frank if found guilty of "wilfully" refusing to pay is one of thousands of parents who could face up to 12 months in jail if legislation before the Federal Parliament is passed. The precise definition of "wilful" will be left up to the discretion of a Family Court judge or judicial officer.

The Government's push to jail parents who defy court orders includes provisions to jail those who refuse to comply with parenting orders (giving the parent without custody access to the child) on a "three strikes and you're in" basis. The maintenance provisions will mostly affect men while the penalties for parenting orders will mostly affect women.

The new legislation, by increasing punitive powers, is an attempt to overcome the biggest problem with Family Court orders - they are virtually unenforceable.

But both men's and women's lobby groups and some family law observers argue the proposals will be dangerously counterproductive, to the point of increasing the already high suicide rate among separated parents.

Critics say the proposed laws are a draconian way of avoiding the real problem, which they say lies in the nature of family law in Australia and the institutions that administer it. They say the CSA, in making "quasi-judicial" decisions that are virtually impossible to appeal, often has the effect of putting parents into debt unfairly.

Many of those who could be jailed would be placed in this predicament not because they did not want to pay but because they have been made unable to pay through maladministration.

The debate over jailing parents, could have some interesting parliamentary twists. The Australian Democrats do not support imprisonment as a primary enforcement option. The Labour Party supports the jailing of those who fail to pay maintenance but not those who refuse to comply with parenting orders.

The Family Court already has provisions for jailing and imposition of fines, and the CSA can seize assets, impose penalties, sweep bank accounts and initiate prosecutions with a six-month jail penalty. The new legislation adds to the arsenal by providing a more direct avenue to jail parents who disobey court orders, and stiffer penalties.

A re-evaluation of child support is happening around the world. Like many men, Frank facing mounting debts, has found himself in a surreal world post-separation. The CSA is not bound by rules of evidence. If he is charged, tried and jailed, secrecy clauses mean his case cannot be reported. A Family Court ruling cannot be appealed on an error of fact.

Continued..........

Attorney-General Daryl Williams,  in  introducing   the Family  Law Amendment Bill 1999, has reopened a broader debate. The dysfunctions of family law highlighted by the jailing initiatives have reignited call for a non-adversarial tribunal system to replace the Family Court and focused attention on the CSA, six years on from an exhaustive joint select committee report that made history for the number of submissions to its drafting.

The report said there were many complaints about the CSA, including "inconsistent advice, administrative errors and refusal to verify data ... the inaction or lack of service is inexcusable ... The end result is an often appalling client service delivery."

Many of the report's 163 recommendations - including an external review of the CSA "as a matter of priority", close study of its social impacts, its impacts on subsequent families, disincentives to working and a re-assessment of the child support formula have not been carried out.

Commentator on public sector ethics at Central Queensland University Robert Kelso says jailing could exacerbate the high suicide rates among parents separated from their children. He says the CSA is a self-contained bureaucracy whose clients have "no way out to the normal legal system". He says the 1994 inquiry into the CSA, read in conjunction with the Hansard of the time,  clearly identifies systemic corruption by public servants whose objective was to minimise the cost to the Commonwealth of supporting single parents by welfare, by maximising revenue from their non-custodial spouses.

"Neither the Labour government not its Liberal successor have been interested in examining the behaviour of these public servants," he says.

Kelso says there is ample evidence the CSA is acting against the public interest, creating false debt by exaggerating incomes of fathers and ignoring social security and taxation fraud when it favours the custodial parent, usually the mother. He says it is thereby failing in its duty to the Crimes Act and, in it complicity in fraud, is breaching the Public Service Act.

"It is in this context we are talking about sending parents to jail," he says. "The Government is exacerbating an already poisoned environment by introducing jailing penalties.. Government agencies and welfare industries have studiously avoided the wide ranging research into the failure of the scheme. What is needed is a royal commission with the widest possible powers. In this climate, in the hands of the CSA and the Family Court, the last thing we need to be doing is introducing jailing penalties."

Case Study: swamped by debt

James has four children aged 10 to 15 whom he sees more than 40 per cent of the time.

"I have done the right thing by the children," he says. "When my wife left me she said I was too much of a family man.

"The impact the CSA has had on my children's lives has been pathetic. It has to be held accountable. I believe the time will come when children will take the CSA to court."

James (not his real name) has a back debt of $40,000. About $27,000 is penalty for late payment. He says this is a false debt because it accrued when he had lost an $80,000 -a-year job but a review from the agency kept him on that salary.

Last year it took his $4500 tax refund. On Christmas Eve he received a letter informing him that his bank accounts has been swept, the money seized. One of the accounts was money in trust for the children - $2000 - which James says took the children five years to save. He was so outraged, it became a mini cause celebre in the local media.

"The CSA's response was they didn't know where the money went but that it probably went to the custodial parent. The kids have asked about it and she denies knowing anything about it.

"What really gets under my skin is the injustice."

continued .....

The jailing furore casts a shadow over the Attorney-General's well-intentioned attempts to reform family law. The Federal Government has already encouraged separating couples to avoid, where possible, the Family Court in favour of mediation and counselling, and discouraged litigation by cutting Legal Aid.

The Attorney-General's overall idea was simple: create a stream- lined federal magistracy service, with a hefty start-up budget of $30 million, to begin operations midyear, to partially sideline the Family Court; then make orders enforceable so children would not be denied either money or a relationship with their non- custodial parent, the two biggest beefs on either side of the custodial divide.

Designed to appease everyone, the proposed new laws have appeased no one.

Williams has said the new enforcement regime is "to better protect the interests of children".

"The threat of imprisonment will be reserved for the most serious cases .... it is entirely appropriate that the court should have available to it, alongside the range of sanctions that already exists, the sanction of imprisonment," he says.

The Attorney-General has refused to answer questions on the legality or constitutionality of the legislation. He also declined to say how children will be ensured a continued relationship with their jailed parent and why he is handing more power to the judges of the Family Court.

Williams also declines to say whether jailed parents would be placed on suicide watch.

If, as research from leading suicide expert Pierre Baume and others suggests, 70 per cent of suicides of adult males aged 20 to 60 are related to relationship breakdown, based on the latest Australian Bureau of Statistics figures at least 20 men a week are killing themselves after separation. this is five times the rate of youth and female suicides.

Griffith University research psychologist Susie Sweeper, and expert on separation, says there are high levels of stress associated with the Family court and CSA.

"The accumulation of stress from not seeing the children, low finances, litigation and low levels of social support can lead to psychopathology such as suicide," she says. "Some [parents] are very angry ... That is certainly expressed.

"By putting these people in jail you would increase their stress levels further. This would not assist children."

Case Study: beaten by bureaucracy

LEANDRA'S (not her real name) two youngest children, four and seven, live with her; she is bringing them up in the most expensive city in the country. Her former husband lives on a pension in a Queensland coastal town. Her eldest son, 10, lives with his father.

Because I am working, I have to pay him $150 per week. He is not working and is on a full time sole parent pension, although he does work for cash in a boat yard.

"Even though I have made this fact quite clear, no one wishes to look into it. They say until he lodges a tax return, it is on their records that his only income is a pension.

"He is getting $700 a fortnight, $300 from me, plus his cash income, plus the child is living with his grandparents at least four nights out of the seven.

I doubt very much if my child sees that $600 a month, or the grandparents. There are lots of extras I could buy my children for the $600 a month. And the only time I get to see my son is when I fly up or pay to fly him down.

The CSA is bound by ridiculous policies, it is definitely encouraging welfare dependency. If you get a pay rise, you have to pay more. You hesitate to take a promotion.

Continued .......

With paying parents unable to specify how their payments are spent, CSA research suggests half of all payers do not believe their money is benefiting their children.

CSA policy director Sheila Bird says Australians have much to be proud of, with 90 per cent of all liabilities paid since the agency's inception. She claims this is the world's best.

She disputes doubts raised by men's groups over the honesty of the agency's review officers and disputes claims made by many paying parents that the formulas used by the CSA are inflexible and fail to take into account individual circumstance.

Bird says that where a parent refuses to pay, it is appropriate for the CSA to take court action. "If parliament gives the court the authority to jail a person for an offence, then the court determines whether that is "appropriate," she says.

Bird says she does not know the suicide rate among paying parents.

The chairman of the 1994 joint select committee on the child support scheme, Roger Price says no one should think the CSA was set up to benefit children. He says its sole rationale is to save taxpayer money by clawing back social security payments, as each dollar paid by a parent reduces the amount of social security paid to the recipient. "It is not about the best interests of children and never has been," he says.

He is angry the effort that went into the 1994 inquiry has been wasted, with the Government "cherry picking" the punitive measures suggested in the report to further enforce money collection.

Price, one of the most high profile advocates of a non-adversarial tribunal to replace the Family Court, says there has to be a better method than jailing people.

"We have to find a less battering and bruising and financially crippling system," he says. "The Family Court and Child Support are a nightmare legal maze. Jailing is most definitely the wrong way to go.

"What frightened me while doing the report was the level of frustration I found. People had spent all their money on legal cases, borrowed from credit cards, borrowed from parents, and were seething with anger. I was frightened to see that level of frustration and anger. This continues to this day, absolutely.

"Back in 1994, when I said
peoplewere committing suicide
in major part because of family
law matters, people were disbelieving.
No one disbelieves it anymore."

KATHERINE always cries when she
talks about her brother Joseph (not
their real names), who committed
suicide at the age of 34 after a call
from the Child Support Agency.

He had four children between three
and 12, who were living with his
ex-wife.

"He was a very naive person, gentle,
kind, caring person,never pushy,"
Katherine says.

"He had been depressed because he
had no money, he had absolutely
nothing. Mum fed him, his sisters
bought clothes.

"That day he went to the doctor.
The doctor said he was happier than
he had normally been.

"We left the house to pick up a
daughter; I said 'Joseph, your
dinner is in the fridge.' "

The coroner's report records how
the agency phoned Joseph on the
evening of his suicide attempt,
telling him that because he had
overpaid by $800, he had to write
a letter so his former partner
could get the money - otherwise
it would go in administrative costs.
He was told he could not have it
back.

Joseph drank a poison known as
Lethabarb.
It took him 19 days to die.

The coroner's report records that
an attempt was made to identify the
relevant agency officer "for the purposes
of this inquest and to have him or her
called as a witness".

However, the coroner records that
"secrecy provisions" meant the agency
was not required to disclose any
information.
Agency representatives did not attend the inquest.

"Eight hundred dollars, that money would
have eased things so much, made such a
difference to his life," his sister says.
"The next month the CSA wrote wanting
to know why he wasn't paying his child support.

""How are we supposed to teach our
children not to run people into the
ground, humiliate and degrade them,
just for your own benefit?"

continued ...

The greatest paradox of the jailing debate is that both men's and women's groups are united in their opposition; although the Attorney-General might not see any humour in this historic rapprochement.

Sole Parents Union president Kathleen Swinbourne says: "Children do not benefit from seeing either of their parents dragged off by the police and put in jail."

Sarah Maddison from the Women's Electoral Lobby says the general response across women's groups has been one of horror at the suggestions that parents could be jailed for failing to comply with Family Court orders of any description.

"Child Support is not working for either parent at the end of the day," she says. "Both sides feel ripped off."

the men's groups, who will be most affected by the jailing provisions, have been vociferous in their opposition. Barry Williams of Lone Fathers says: "I do not trust the Family Court to make fair decisions."

Malcolm Mathias of Fathers for Family Equity describes the proposals to jail parents as "extreme, unwarranted, ill-conceived and draconian".

"Many non-custodial men are forced to live in cheap accommodation, are compelled to leave paid employment, forced into bankruptcy, lose contact with their children, lose any prospect of a comfortable retirement and a growing number ultimately commit suicide."

Sue Price of the Men's Right's Agency says the jailing furore highlights the need to look at the financial and social cost of the style of custodial orders made by the Family Court since its formation a quarter of a century ago.

"It is a harsh regime when people are having more than one third of their income garnisheed, yet have no say on where the money goes and are not sharing in the joys of raising their children," she says.

The Child Support Agency

• Although it affects the lives of millions of Australians, studies show only half of the population has heard of the CSA. What many do not realise when they separate is that after the property and children are divided, it is just the start of their dramas. Non-custodial parents can lose as much as one-third of their gross income on a weekly basis until their children leave university. The body that calculates the payments, administers the transfers, and take punitive action against the non-payers is the CSA.
• Founded in 1988 with bipartisan support, the CSA has more that 1 million clients catering for about 1 million children. Including grandparents, but excluding siblings, it affects 6.5million people. There are 5000 to 6000 new cases a month. The cost of operation is $190 million and the saving in social security payments is estimated at $419 million; &1.324 billion is transferred each year.
• Many groups argue that the agency costs more than it saves because of its disincentives to work for both payers and payees. Depending on the method of calculation, unemployment among payers is 22 per cent to 32 per cent. About 192,000 payers earn less than $10,000 a year.
• The total child support debt is $455 million, and the CSA estimates 62 per cent of parents are in arrears.
• After tax, superannuation, Medicare, earning expenses, child support, access costs, rent and food, a non-custodial parent earning the average wage has %15 a week to meet all other expenses including gas and electricity.
• The formula is one of the most contentious aspects of the CSA. The percentages are calculated on gross income but taken out of net income. There is, however, a safety-net minimum that must be left to the parent: an amount equal to the single unemployment benefit.
• The payment formula works out as follows:
  One child: 18 per cent of gross income after the single unemployment benefit has been deducted.
  Two children: 27 per cent.
  Three: 32 per cent.
  Four: 34 per cent.
  Five or more: 36 per cent.
• The Commonwealth Ombudsman has consistently criticised the CSA for complexity. There are 7500 formal complaints made each year, including 2282 via the minister's office or parliament last year. Only five out of every 1000 complaints are upheld. Although the Family Court is the relevant court of appeal, only 0.28 per cent of child support cases have been ordered by the court, with the remaining cases being governed by CSA rulings.
• There are 1200 cases before the CSA litigation unit. The CSA intercepts $47 million in tax returns each year.
• 92.2 per cent of payers are men and the rest women, an increasing number of whom are in default.
• Although there are concerns that the CSA is contributing to high suicide rates among separated men, the agency claims not to know how many of its paying parents are affected.