Parents able to 'manipulate' child support system free of consequences: ombudsman report

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2 days ago

Australia's child support system has been weaponised for financial abuse that is "amplified" by Services Australia, according to a Commonwealth Ombudsman's investigation.
That abuse included parents not making payments, not filing tax returns to disguise income, lying to reduce income and being abusive or violent to stop a parent seeking help.
This abuse was amplified by a tax system that calculated income assuming all support payments were made — even if they weren't — and by procedures at Services Australia that could disclose sensitive information to ex-partners, the report found.
"This is really important because child support is all about children — vulnerable children — who need to be financially supported while they're growing up," Ombudsman Iain Anderson said.
In Australia more than 1.2 million separated parents have an arrangement that sees one parent pay the other to assist with the costs of raising an estimated one million children.
Services Australia is responsible for about half of those arrangements through the Child Support program, with the rest in what is called Private Collect, where one parent directly pays the other.
The Ombudsman's report, released exclusively to ABC News, concluded that Services Australia was acting in an "unfair and unreasonable manner" in not using available powers to stop widespread financial abuse.
"This passive approach is unfair. It allows some paying parents to manipulate the system to avoid their financial responsibility in raising their children, largely without consequences," the report concluded.
The amount of money some parents are avoiding paying is big.
Mr Anderson said 153,000 parents had a combined $1.9 billion in outstanding child support debts in December last year.
The report showed outstanding payments disproportionately impacted mothers — with 84 per cent of those receiving payments being female.
The Ombudsman's report made eight recommendations, including having Services Australia track financial abuse and use its enforcement powers to claw back the $1.9 billion in unpaid child support.
Current Services Australia processes can require a parent to tell their non-paying ex-partner their location or workplace, which can be abused by non-paying parents and re-traumatise parents who have experienced domestic violence, the Ombudsman said.
"They have and go through these very burdensome processes, so that in itself can exacerbate previous abuse," Mr Anderson said.
"We've certainly had complainants who said to them that this made them feel very unsafe and they in fact withdrew from processes and rather than seeking to pursue unpaid child support."
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Jane (not her real name), a single mother of three from Canberra, said she has gone through experiences like that.
"That's the way I felt and again the scrutiny was on myself and what I had submitted. The focus was not on the needs of the children."
Jane said she almost walked away from seeking extra support for her youngest child, who has significant medical needs, because the demands for documentation were so onerous.
"The forgotten party in all of this is actually the children. I think that's a really important point," she said.
The Ombudsman's report called for a legislative fix to force Services Australia to make the system fairer.
Currently, Services Australia is required to assume all child support has been paid when assessing eligibility for tax concessions for parents like Family Tax Benefit A.
This can result in parents having a tax debt for child support they are owed but did not receive, a process the Ombudsman said "absolutely" victimised parents.
"This is unfair and places those parents at a double disadvantage — in effect amplifying the impact of the financial abuse they are suffering through the actions of their former partner," the report concluded.
Services Australia currently has a restriction, allowing it to collect just three months of unpaid child support if a parent changed from private collection to the government system.
The report recommended legislation that would also lift that restriction.
Legislative fixes were also required to allow debts to be recovered from bank accounts held in joint names, allow better information sharing between agencies and track domestic violence, the report said.
In a statement, a Services Australia spokesperson said it fully accepted the recommendations and would be working to implement them between December 2025 and June 2026.
"Financial abuse and all forms of family and domestic violence are serious and damaging issues affecting many of our customers," the spokesperson said.
"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."
In a statement on behalf of the Social Services and Government Services ministers Tanya Plibersek and Katy Gallagher, a spokesperson acknowledged child support was being used to "exploit and traumatise women" and that the government was acting.
"We are currently undertaking a number of reviews across the Child Support Scheme, looking closely at compliance, with a focus on income accuracy, collection and enforcement," the spokesperson said.
"This work will be finalised in the coming months and will help inform future reforms to ensure that the Child Support Scheme cannot be misused as a vehicle for ongoing financial control or abuse after separation."
Terese Edwards, CEO of Single Mother Families Australia, has long lobbied for change and said several inquiries over the decades have identified similar flaws.
"The child support system has been a problem for decades. That's witnessed in the $1.9 billion debt owed to children," Ms Edwards said.
The organisation said it was optimistic there was growing momentum for major changes to child support following a recent inquiry into the Australian Tax Office and a parliamentary one into financial abuse.
"The [payment] levels are so unrealistically low and unreliable, to the point that banking institutions don't use that income when they're looking at income coming in," Ms Edwards said.
"Also, real estate agencies don't take it into account when they're looking at rental properties."