The audit objective was to assess the effectiveness of the Department of Human Services’ administration of the child support objection review process.

Summary

Introduction

1. Every year, significant numbers of families with dependent children experience breakdown through parental separation. In 2012, 49 917 divorces were granted in Australia, with around half of these involving families with children under 18 years of age.1 Some parents enter into independent arrangements for the financial support of their children after separation. However, many parents elect to handle child support matters through the involvement of the Child Support Scheme (the scheme): in 2012–13, some 76 053 parents and eligible carers2 were newly‑registered under the scheme.

The Child Support Scheme and the objection review process

2. The scheme was introduced by the Australian Government in 1988 to address concerns about the adequacy of child maintenance and difficulties in the collection of child maintenance payments, as well as the implications for government expenditure if absent parents did not contribute towards their children’s upbringing.3 The scheme provides a means for independently calculating child support as well as providing a mechanism for transferring child support payments between parents. In 2012–13, the scheme transferred $3.4 billion between parents for the benefit of approximately 1.2 million children. Since 2004, the scheme has been administered by the Department of Human Services (Human Services), exercising powers under the relevant legislation4 which also provides for the appointment of a Child Support Registrar (the Registrar).5

3. A parent or eligible carer (the customer) can request the Registrar to formally review a decision if the customer believes that a departmental child support officer has used incorrect information; has not considered relevant information, including new information if it has since become available; incorrectly applied the appropriate law or policy; or made the wrong decision in the circumstances of the customer’s case. The request for review is referred to as an objection.6

4. Reviews are conducted by a number of dedicated teams using legislative powers delegated to staff by the Registrar.7 Reviews are classified by the department as regarding either:

  • change of child support assessments (commonly known as ‘Part 6A’ objections)8; or
  • any other matter (‘general’ objections).

5. Where both customers are Australian residents, the Child Support (Registration and Collection) Act 1988 provides that reviews are to be completed within 60 calendar days of the objection application being lodged. If the review involves a customer living overseas, the department has 120 days to complete the review.

6. A review is not restricted to examining whether the original decision was legally correct, but makes the decision afresh, taking into account all relevant legislation, guidance and information, including information that may not have been available to the original decision‑maker.9 If a customer is dissatisfied with the outcome of an objection review, they have the right to appeal to the Social Security Appeals Tribunal (SSAT). In hearing an appeal, the SSAT also makes the decision afresh, again potentially taking into account additional information not available to the previous reviewer.

7. As well as enabling parents to test the lawfulness and merits of a child support decision, objection reviews are a mechanism for Human Services to learn from and improve its decision‑making.

Audit objective and criteria

8. The audit objective was to assess the effectiveness of the Department of Human Services’ administration of the child support objection review process.

9. To assist in evaluating the department’s performance in terms of the audit objective, the ANAO developed the following high level criteria:

  • the department effectively promoted the review process and ensured accessibility for those considering objections;
  • the department implemented fair10 and responsive processes and practices to decide on objections in an effective and timely manner; and
  • the department analysed, and reported on, the outcomes of reviews to support the systemic improvement in child support decisions and associated processes.

Overall conclusion

10. Over 25 years, the Department of Human Services’ Child Support Scheme (the scheme) has provided a means for independently calculating support payments for the children of separated parents, as well as providing a mechanism for transferring child support payments between parents. In 2012–13, the scheme transferred $3.4 billion between parents for the benefit of approximately 1.2 million children.

11. The objection review process, a feature of the scheme since its inception, enables a parent or eligible carer to request a review of a child support decision made by the department. In 2012–13, the department received a total of 15 307 objection applications11 and completed 14 032 objection reviews.12 The administration of the objection review process is resource–intensive, involving over 100 staff with a direct cost to the department of $11.17 million in 2012–13.

12. Human Services’ administration of the child support objection review process has been reasonably effective, with the department operating a generally accessible and methodical review process. The objection review process also features a number of positive elements intended to support customers, such as direct customer contact at key milestones, and a capacity to provide more intensive customer support for those with complex issues. However, there remains scope to strengthen aspects of quality assurance and to realise the full benefits of existing mechanisms with the potential to improve outcomes, to the advantage of customers and the department.

13. Those mechanisms include the relatively new Customer Review Gateway, which can help customers avoid the need to seek objection reviews altogether by referring them to specialist officers trained to assist in resolving cases. There is scope to evaluate the use of the Registrar’s existing information‑gathering powers, which include a capacity to compel evidence from non‑cooperative customers, so as to improve the evidence base for departmental decision‑making and reduce the potential for successful appeals on the basis of new information. Further, the more effective use of existing departmental feedback loops, particularly feedback provided by objection review staff to original decision‑makers, has the potential to help reduce both the number of objections lodged by customers and the incidence of original decisions overturned through the objection review process.

14. In a resource‑constrained environment, administrative effectiveness can be further improved by realising the full benefits of existing departmental quality assurance processes and using information that is currently collected to enable improved reporting on performance. Specifically, the department could provide additional assurance on the integrity of the objection review process by strengthening existing processes for recording delegate approvals of decisions and pre‑decision quality assurance checks. Further, public reporting should include information such as the number of departmental decisions overturned through the objection review process and on appeal to the Social Security Appeals Tribunal, to improve stakeholders’ capacity to assess the effectiveness of departmental decision‑making under the objection review process.

15. The ANAO has made four recommendations aimed at improving the department’s administration of the child support objection review process. The recommendations relate to: reviewing use of the Registrar’s information gathering powers; recording delegate approvals of decisions and completion of pre‑decision quality assurance checks; improved feedback by objection officers; and improved public reporting on the effectiveness of the department’s decision‑making.

Key findings by chapter

Making the objection review process accessible to customers (Chapter 2)

16. An accessible internal review process enables customers to readily test the merits and lawfulness of decisions that affect them.

17. Clear advice to customers on the outcome of child support decisions is an important first step in helping customers decide whether to exercise review rights, and the department has sought to improve the quality of that advice. The department provides explanations of its decisions by correspondence and, where a more personal approach is considered appropriate, by telephone. The use of letter templates supports efficient administration and a consistent approach, although the ANAO observed some variation in the level of detail included in letters and there is scope for improvement in the use of templates, to realise their full benefits. The benefit of a continued focus on the quality of advice is underlined by a recent departmental survey, which indicated that customer satisfaction with child support letters was significantly below levels of satisfaction for letters produced through other Human Services programs.

18. Customer surveys have also indicated a relatively high awareness of objection review rights. However, a recent decision to no longer issue an informative brochure on objection rights, which previously accompanied decision notification letters, has placed the onus on customers to access information on the department’s website or by otherwise contacting the department.

19. The relevant legislation requires that most categories of objections must be lodged in writing, a potential impediment to accessing the review process. To support customers and contribute to the efficiency of the process, Human Services seeks to discuss applications once they are received, focusing on clarifying the application and providing information on process issues.

20. In the context of a diverse Australian community, the accessibility of the objection review process could be improved by better servicing customers with special needs, including those with culturally and linguistically diverse (CALD) backgrounds. Child support customers can access translation services and obtain support to access and engage in the objection process through the department’s personalised services area. However, objection officers would benefit from training about servicing CALD customers, and there is scope for Human Services’ multicultural service officers to provide additional support relating to the design and delivery of child support services for these customer groups.

21. The objection review process is one that potentially involves significant effort by both customers and the department. Whilst not discouraging persons from their legal right to lodge an objection, it is appropriate that the department explore options other than objections if a child support customer is unhappy with a decision. The department has implemented a Customer Review Gateway (CRG) process with the potential to reduce the number of objections by referring customers to specialist officers trained to assist in resolving cases; a useful initiative with the potential to provide additional support to customers and reduce the number of objections to departmental decisions, to the benefit of all parties. In 2013 only around 2.7 per cent of customers lodging objections had a pre‑objection discussion through the CRG process, and the proportion of referrals to the CRG varies significantly between child support team locations. To realise the potential benefit of the CRG initiative, there would be benefit in the department monitoring whether relevant cases are being referred to the CRG.

Operation of the objection review process (Chapter 3)

22. The quality of decision‑making is improved by access to an appropriate evidence base. Further, the efficiency and effectiveness of the objection review process is reduced where decisions are overturned on appeal because additional information, not available to the staff member undertaking the review, is provided as part of the appeal process.

23. Gathering evidence from non‑cooperative customers presents a particular challenge for objection officers, as does evaluating the reliability of verbal advice where documentary evidence is lacking. The Registrar has legal powers to require customers to provide information, which are rarely used due to the perceived sensitivity of doing so. To inform decisions of the Registrar and delegates, the department should evaluate the use of information‑gathering powers provided by the Parliament in situations where a customer has a history of unreasonably declining to comply with informal requests for information.

24. ANAO analysis indicates an increase, over the past four years, in the proportion of objections leading to a change in the department’s original child support decisions. This trend is particularly evident for Part 6A objections, which relate to varying child support assessments due to special circumstances, with the proportion of successful objections increasing from 35.9 per cent in 2009–10 to 45.4 per cent in 2012–13. There would be benefit in the department focusing more on learning from objection outcomes, as a first step in considering how to reduce the proportion of overturned decisions.

25. During 2012–13, the department encountered difficulties in completing objection reviews in a timely manner. Delays have been most pronounced for Part 6A reviews, with performance against statutory timeframes falling significantly—from 86.2 per cent in 2011–12 to 35.7 per cent in 2012–13—before recovering, to some extent, to 56.0 per cent in the six months to December 2013. A contributing factor has been the rise in the number of objections received in 2012 and a reduction in the number of staff available to progress objections. Further, staff advised the ANAO that the time required to complete objections had increased to some extent due to an increased emphasis on customer contact and improved evidence collection. A continued focus on monitoring performance against statutory timeframes would help avoid a further decline in performance.

26. ANAO analysis indicates that the average number of objections completed per full–time equivalent (FTE) objection officer has declined over the last four years13; a reduction in overall administrative efficiency. The department has recognised timeliness and productivity as significant issues and potential improvements are currently being explored through an internal business review process14 which, as previously discussed, could usefully consider how best to reduce the proportion of overturned decisions.15

27. There is also scope for the department to improve the consistency of recording whether mandated quality control processes relating to objection review decisions have been implemented. ANAO analysis of a sample of objection case files indicated that evidence of formal delegate approval of Part 6A decisions could not be produced in 35 per cent of cases.16 The department advised the ANAO that the causes of the failure to record delegate approvals for Part 6A decisions had been identified and remedial action taken.

28. Human Services generally has appropriate measures in place to protect customer privacy, and to manage potential conflicts of interest where a child support officer may have some personal connection to a case. There were however some gaps in departmental record‑keeping regarding approvals for staff access to information on ‘restricted access customers’ (RACS).17 There have also been instances of unauthorised or inappropriate access to customer records by child support staff, some of which have resulted in disciplinary action being taken against the relevant officers. Human Services advised the ANAO that it has recently expanded the scope of monitoring programs in place to detect instances of unauthorised access.

Learning from the objection review process (Chapter 4)

29. Human Services has in place feedback and reporting mechanisms to facilitate monitoring of the objection review process and to improve the quality of its decisions. However, the department has not realised the full benefit of those mechanisms, as they are not consistently implemented or employed as intended. The ANAO’s examination of 100 objection case files, including 40 Part 6A objection reviews, indicated that under departmental procedures, feedback should have been provided to original decision‑makers in 14 of the 40 Part 6A review cases. However, departmental records indicated that feedback had not been provided in any of the 14 cases.

30. In addition, following‑up departmental analysis of Social Security Appeals Tribunal outcomes has received insufficient priority, notwithstanding the potential insights it offers for improved departmental decision‑making and practices—necessary steps in reducing the proportion of overturned departmental decisions and realising efficiencies.18

31. Human Services’ public reporting on the objection review process has focused mainly on quantitative measures such as the number of objections received and reviews completed. However, these measures provide limited insights into the effectiveness of the department’s decision‑making. The use of appropriate ‘proxy measures’19 in public reporting—such as the number of departmental decisions overturned through the objection review process and on appeal to the Social Security Appeals Tribunal—would improve stakeholders’ capacity to assess the effectiveness of departmental decision‑making under the objection review process. Responsibility for reporting on the working of the Child Support (Registration and Collection) Act 1988, including the objection review function,now rests with the Department of Social Services20, which should include information on the effectiveness of the Department of Human Services’ decision‑making.

Summary of agency responses

32. The Department of Human Services provided the following summary response to the audit:

The Department of Human Services (The department) welcomes this report and considers that implementation of its recommendations will further enhance the integrity, service delivery and quality of decision-making in the child support objection process.

Improving the evidence gathering, quality assurance and feedback aspects of the process will enhance the department’s ability to deliver an accessible, high quality service to customers, and to ensure the objections process is effectively utilised to improve decision making within the Child Support Program.

The department agrees with the recommendations outlined in the report and has commenced implementation.

33. Other than responding to the audit’s recommendations, Human Services did not provide any further formal response to the audit. However, the covering letter from Human Services is included at Appendix 1.

34. The Department of Social Services provided the following summary response to the audit:

The Department of Social Services (DSS) welcomes the findings of the audit report on the Review of Child Support Objections and agrees to Recommendation Number 4 with qualification.

DSS acknowledges the requirements under section 14 of the Child Support (Registration and Collection) Act 1988 to include information in its annual reporting regarding the overall working of the Act (the Child Support Scheme). However, section 63 of the Public Service Act 1999 (Annual Report) requires the Secretary of a Department to report on the Department’s activities in its Annual Report.

As the proposal is to report on the effectiveness of decision‑making by DHS under the objection review process, it is more appropriate that this activity be included in the DHS Annual Report.

However, to assist in implementing the recommendation, DSS will collaborate with DHS on the development of these measures, for inclusion in the DHS Annual Report.

35. Social Services’ full response is included at Appendix 1.

Recommendations

Recommendation No.1

Para 3.19

To improve the evidence base for departmental decision‑making and reduce the potential for successful appeals on the basis of new information, the ANAO recommends that the Registrar evaluate the use of existing powers to require customers to provide information as part of the objection review process.

Human Services’ response:

Agree. The Department of Human Services will review the use of existing powers to compel customers to provide evidence. This will commence immediately.

Recommendation No.2

Para 3.41

To provide additional assurance on the integrity of the objection review process, the ANAO recommends that the Department of Human Services strengthen existing processes for recording delegate approvals of decisions and completion of pre‑decision quality assurance checks.

Human Services’ response:

Agree. The Department of Human Services has since put in place appropriate record keeping for delegate approvals. Further to this, a quality framework has recently been implemented for child support objections. This includes ensuring that all quality checks of decisions are appropriately recorded.

Recommendation No.3

Para 4.12

To improve service delivery and decision‑making, the ANAO recommends that the Department of Human Services provide feedback to original decision‑makers in accordance with departmental procedures and undertake periodic reporting to senior child support management on key issues identified in reviewer feedback.

Human Services’ response:

Agree. The Department of Human Services has recently implemented a quality framework which will ensure feedback to original decision makers is provided in appropriate circumstances. A periodic report for senior managers, which summarises feedback relating to common and systemic issues, is being developed.

Recommendation No.4

Para 4.37

To improve performance reporting on the effectiveness of departmental decision‑making under the objection review process, the ANAO recommends that the Department of Social Services develop appropriate proxy measures, such as the number of departmental decisions overturned by review processes, to include in its annual reporting on the working of the Child Support (Registration and Collection) Act 1988.

Social Services’ response:

DSS agrees with qualification. DSS will work with DHS to develop proxy measures and to have them reported in the DHS annual report.

Human Services’ response:

The Department of Human Services notes this recommendation is for the Department of Social Services’ response. The Department of Human Services will work with the Department of Social Services to ensure appropriate measures are developed which also align with the funding arrangements for the programmes.

Footnotes

[1] Australian Bureau of Statistics, Marriages and Divorces, Australia, 2012.There are no statistics available on the number of separations of unmarried parents.

[2] These mostly include legal guardians, grandparents or other family members. Such persons must provide at least 128 nights of care for the relevant child or children to be eligible to make a claim for child support from one or both of the parents.

[3] The objectives of the original legislation (the Child Support Act 1988) included parental responsibility for the financial well-being of children when parents separate. The current legislation underpinning the scheme still does so: see the Child Support (Registration and Collection) Act 1988 and Child Support (Assessment) Act 1989.

[4] The Child Support (Registration and Collection) Act 1988 and Child Support (Assessment) Act 1989.

[5] The Child Support Registrar is a senior executive of the Department of Human Services.

[6] The legal right to lodge an objection is set out in the Child Support (Registration and Collection) Act 1988.

[7] During periods of high workload, Human Services officers outside these teams may be seconded to work on objection reviews.

[8] This is because the change of assessment decisions being objected to are made under Part 6A of the Child Support (Assessment) Act 1989. Part 6A provides a mechanism whereby under special circumstances Human Services can vary the amount of child support that would otherwise be payable under the relevant administrative formula.

[9] Department of Human Services, Objections Procedural Instruction, p.1. In this audit, the term ‘original decision’ is used to mean a decision made by the department for which a customer may lodge an objection.

[10] The concept of fairness (incorporating matters such as impartiality and sufficient opportunity to be heard) is a key underlying principle of a good internal review process: Administrative Review Council, Report No.44 Internal Review of Agency Decision Making, 2000, pp. 1 and 7, [internet] available from <http://www.arc.ag.gov.au/Documents/report44.pdf> [accessed October 2013].

[11] This figure excludes objections to care decisions that are lodged with Human Services through the separate Centrelink review process. In 2012–13, Centrelink completed 1452 reviews of care decisions.

[12] These ‘completions’ include some 5050 reviews where applications were ruled as invalid or the customer withdrew the application at some point during the review process.

[13] While there has been some variation in staff numbers during this period, the overall child support objections workforce has been maintained at around 105 FTE officers. However, over the same period, the total number of objections has fallen by around 20 percent, with a larger decrease (26 per cent) in the number of the more complex and time‑consuming Part 6A objections.

[14] Human Services advised the ANAO that while some proposals for revised procedures had been developed, as at February 2014 no decision had been made about possible implementation.

[15] As discussed in paragraph 4.36 the number of departmental decisions overturned through the objection review process and on appeal to the SSAT is a potential proxy measure for the performance of the objection review process.

[16] In relation to general objection decisions, Human Services was unable to provide evidence of so‑called ‘simple checks’ in 27 per cent of cases in the ANAO sample of 100 Part 6A and general objection case files.

[17] The classification of customer information as RACS means that information on file is placed under higher security and information held is reclassified, limiting the number of officers who can access the information.

[18] There is a significantly lower average cost to Human Services of completing objection reviews as compared to the cost to the SSAT of running hearings on child support appeals.

[19] Proxy measures are output‑level performance indicators and may be useful to indirectly measure effectiveness in certain situations. See Department of Finance and Deregulation, Performance Information and Indicators (October 2010), Finance, Canberra, 2010, p. 3; and ANAO Audit Report No.21 2013–14, Pilot Project to Audit Key Performance Indicators, p.74.

[20] Responsibility for the administration of all aspects of the Child Support (Registration and Collection) Act 1988 was transferred to the Department of Social Services under changes to the Administrative Arrangements Order in December 2013.