‘Broken': Single mums financially abused

Perth Now

2 days ago

Australian child support frameworks are in urgent need of reform as a new report reveals the number of parents, especially women, financially abused through the system.
The Commonwealth ombudsman into the 'weaponisation' of the child support program has revealed the dark underbelly of the financial abuse rife throughout the system, with more than 153,000 parents having a combined $1.9bn in unpaid child support.
Parents lying about their income, deliberately reducing their earnings, lying about how much they care for the children, or just straight up refusing to pay have all been identified as evidence the system is failing families, especially women and children.
'The legislation needs reform to address systemic problems and help Services Australia ensure children are not deprived of the financial support they need,' Commonwealth Ombudsman Iain Anderson said.
In a survey of more than 500 separated mothers, four in five said their former partner had used the program to commit financial abuse.
The system is meant to support more than 1.2 million separated parents and 1.1 million affected children.
About 84 per cent of parents receiving child support payments to be women. The report has revealed the plethora of ways child abuse can be used as a form of financial abuse. Commonwealth Ombudsman Credit: Supplied
The report condemned Services Australia as being 'unfair and unreasonable' by failing to use its powers to enforce payments.
'This passive approach is unfair,' the report said.
'It allows some paying parents to manipulate the system to avoid their financial responsibility in raising their children, largely without consequences.'
It is reported that the Services Australia lacked the frameworks to proactively respond to cases of abuse.
'I am a single mum trying to look after my children. One has a disability. Services Australia is taking $500 from me a week and I simply cannot afford this,' one woman wrote in a complaint to the Ombudsman.
'My rent alone is $580. I am going to end up homeless with my kids and Services Australia is not understanding at all.'
Under the current system, when a child support payer lodges their tax return, the government assumes any outstanding child support has been paid, which raises an overpayment of the Family Tax Benefit Part A.
Services Australia then recovers the 'overpaid' FTB A, whether or not the child support has actually been paid. 'I'm going to end up homeless,' the current system is allowing parents to manipulate the child support system, report says. istock image Credit: istock
'This kind of financial abuse is something our member centres see all the time, so we are very pleased to have it recognised in this morning's report from the Commonwealth Ombudsman,' Economic Justice Australia chief executive Kate Allingham said.
'However, what the scope of this report makes clear is that there is something broken at the heart of the social security system.
'It's mind-blowing that it is so easy for a perpetrator to inflict such profound financial harm on another individual; that they are so easily able to create a debt for a former partner which Services Australia is then required to pursue.'
The ombudsman made eight recommendations to Services Australia, including developing a publicly available strategy on addressing financial abuse through child support, more effectively enforcing payments, and training staff to better understand financial abuse.
All recommendations were approved. Services Australia is implementing all recommendations within a year's time. Credit: Supplied
'We thank the Ombudsman for the thorough investigation into this important issue. Financial abuse and all forms of family and domestic violence are serious and damaging issues affecting many of our customers,' a Services Australia spokesman said.
'Services Australia accepts all eight recommendations, and work has already begun to implement these fully.
'We'll implement many of the recommendations by December 2025 and the remainder by June 2026.
'We know financial abuse is a complex issue, and we're working closely with the Department of Social Services, the Australian Taxation Office, and the Office for Women to address this.
'While legislation limits some of the improvements we can make, we acknowledge there's work we can do within the existing policy to better support parents who are child Support customers and their children.' The Department of Social Services accepted all recommendations except for one. iStock Credit: istock
The Department of Social Services also accepted all conditions, except for introducing a Bill to amend the law to address legal limitations for the current system outlined in the report.
'Today's Ombudsman's report confirms child support is being weaponised against single mothers and that government systems have failed to recognise or respond to this. These failures mean the systems themselves have enabled financial abuse,' Single Mother Families Australia chief executive Teresa Edwards said,
'The concerns we have raised on behalf of single mothers over many years have been vindicated.'