A new report calls for major reforms in the child support system while highlighting the financial toll of domestic abuse in Australia, with a staggering $5.7bn impact annually

A parliamentary committee has called for sweeping changes to Australia’s child support system, urging that parents who fail to pay child support be pursued by the Australian Taxation Office (ATO). This bold recommendation is part of a broader set of reforms aimed at tackling financial abuse, which the committee describes as a growing epidemic in Australian society.

The parliamentary joint standing committee on corporations and financial services has tabled 61 recommendations, including measures to overhaul not just the child support system, but also the banking, superannuation, insurance, taxation, and legal systems. The goal of these changes is to protect victims of domestic violence and ensure that perpetrators cannot financially benefit from their abuse.

The committee’s findings reveal a shocking scale of financial abuse in Australia. It estimates that 16% of women and nearly 8% of men will experience financial abuse in their lifetime, a crime that costs victims an estimated $5.7bn annually. Senator Deborah O’Neill, the committee chair, described financial abuse as a “quiet but raging epidemic,” one that often goes unnoticed but devastates the lives of those affected. She said the evidence collected during the inquiry had left her and her colleagues “truly shocked.”

A particularly striking issue raised by the committee is how the child support system is being “weaponised” by perpetrators of domestic abuse. Women and children, especially those in abusive situations, are often left in poverty due to unpaid child support. Currently, nearly 1 million children in Australia are entitled to child support. These payments are managed either through the government’s collection system or private collection services.

The government collection system alone is estimated to be owed $1.7bn in unpaid child support, according to Single Mother Families Australia. In the private collection system, an alarming 70% of women report not receiving the child support they are entitled to. The committee’s recommendation for the ATO to pursue these debts aims to hold parents accountable and ensure that children are not left to suffer from the negligence of one of their parents.

Financial abuse, often occurring alongside other forms of domestic violence, can be particularly damaging for victims. It may involve tactics such as restricting access to money, controlling finances, or failing to provide adequate financial support for children. These practices trap victims in abusive relationships and leave them vulnerable, especially when they are unable to access financial resources that would allow them to leave.

In addition to child support reforms, the committee’s report calls for insurers and superannuation companies to introduce safeguards to ensure that perpetrators of domestic violence do not profit from the deaths of their victims. This measure is intended to close a legal loophole where, in some cases, abusers are named as beneficiaries of victims’ life insurance policies or superannuation accounts.

The parliamentary report has sparked a national conversation about the scale and impact of financial abuse. Senator O’Neill’s committee is pushing for immediate action, highlighting the need for systemic reforms across multiple sectors. The committee believes that by holding perpetrators accountable in financial terms, such as through the ATO’s involvement in child support debt collection, the government can help reduce the prevalence of financial abuse and better support victims in their recovery.

Despite the challenges of addressing such deeply ingrained issues, the committee’s report is a call to arms for policymakers. It urges both federal and state governments to take bold steps in providing more comprehensive financial protections for victims of domestic violence, particularly those facing financial abuse. The impact on children, who are often the silent victims of such abuses, is particularly alarming, and the committee’s reforms aim to ensure that these young Australians are not left to bear the brunt of their parents’ failures.

As the debate over these recommendations continues, one thing is clear: there is a growing recognition of financial abuse as a serious and destructive form of violence. The committee’s report is a significant step towards raising awareness and implementing reforms that could have a lasting impact on the lives of those affected.