How Child Support Incentives Undermine Shared Parenting

Australia’s family law system claims to put children first. In practice, it routinely produces outcomes that increase conflict between parents, entrench financial dependency, and reduce children’s access to one of the two people most important to their development — their father.

This failure is not caused by a lack of concern for safety, nor by a shortage of professionals, programs, or legal process. It is structural. Parenting decisions and child support assessments are built around outdated assumptions about risk, care, and provision. Those assumptions penalise cooperation, reward care domination, and impose heavy financial penalties on both earning income and relinquishing parenting time.

Children pay the price. Many are raised in lower-income households despite the presence of a capable, willing father. Others lose meaningful contact with a parent because financial incentives make cooperation irrational and conflict economically “worth it”. These outcomes are not accidental. They flow directly from how the system is designed.

Lets work towards a real solution
What follows sets out why the current approach fails, how child support and family law interact to fuel conflict, and why reform must focus on incentives, shared parenting, and economic reality rather than ideology. These arguments are drawn from direct involvement in the system, formal submissions to Parliament, observed case outcomes, and years of engagement with parents trying to navigate a process that too often works against their children’s interests.

Why incentives matter more than intentions

Family law and child support operate as an integrated incentive system, whether policymakers acknowledge it or not.

When child support rises steeply with income, earning more becomes financially punitive. When payments increase sharply as parenting time falls, agreeing to less care becomes costly. Together, these mechanisms function as a tax on work and a tax on cooperation.

Parents respond rationally. Some reduce income, avoid overtime, or restructure work to limit exposure to child support. Others fight over care not because they want conflict, but because giving up parenting time carries a significant and ongoing financial penalty. The system rewards the parent who can dominate care and discourages shared parenting, even where it would clearly benefit the child.

Overlooked role of fathers in child wellbeing

Family law systems have increasingly been built around the idea that children are at risk of physical harm from their fathers. That worldview is grossly distorted.

Across large bodies of longitudinal research, children with meaningful involvement from their biological fathers show better outcomes on average across emotional regulation, educational attainment, behavioural stability, and long-term life prospects. This applies to both sons and daughters. Fathers play a distinct developmental role, particularly in boundary-setting, risk calibration, independence, and resilience.

Modern societies already provide a high baseline of physical safety, welfare support, and institutional care. In this environment, the traditional argument that children require protection from fathers as a class is not just outdated. It is harmful. Systems built on that assumption routinely remove children from one of their most important developmental anchors, while ignoring the real-world risks that can arise from instability, weak supervision, and exposure to unrelated adults entering and leaving a child’s life.

How child support undermines shared parenting

Child support is the financial engine that drives many of these outcomes.

The current income-sharing model literally treats separated parents as if they still form a single economic unit, despite living apart, often with new obligations and households. It attempts to equalise living standards between parents rather than focusing on the direct cost of care.

This design guarantees conflict. It inflates the cost of children by aggregating incomes across households, requires one parent to fund up to 100% of those inflated costs in some scenarios, and ties financial liability tightly to care percentages. The result is a system that punishes work and punishes cooperation at the same time.

You do not just create payments. You create incentives.

Why reform must focus on incentives, not ideology

Australia has already run major reviews into family law and child support. The Australian Law Reform Commission conducted its 2018 Review of the Family Law System, culminating in Report 135. Parliament then launched a wide-ranging inquiry through the Joint Select Committee on Australia’s Family Law System, producing an interim report and later a detailed final report on child support and related issues (Final Report PDF).

Despite all of this attention, the practical reality for separated parents has not changed much. The incentive problems that push parents into conflict remain largely intact.

You cannot legislate cooperation while financially punishing it. You cannot promote shared parenting while making it economically irrational. And you cannot improve child outcomes while designing systems that drive parents into conflict, dependency, and disengagement.

A structurally better alternative

The most effective reform is also the simplest: child support should compensate for extra care, not redistribute income between households.

A care-based model removes the financial reward for dominating care, eliminates penalties on the receiving parent’s income, and sharply reduces the incentive to litigate over marginal changes in parenting time. It aligns financial responsibility with actual care provided and allows both parents to earn, cooperate, and contribute without distortion.

Child Support Australia’s proposed alternative is designed around this approach. It removes the worst incentive problems and looks far better on paper than an income-sharing scheme.

See the proposed “Pay for Extra Care” formula here.

Video and supporting material

If you want the background and examples that informed these reform priorities, the video below covers the reasoning.

Support

This site is supported by a small number of aligned projects, including Lerna Courses, which publishes education and career information about online study pathways in Australia.

For parents trying to reduce conflict during separation, tools that support structured communication and parenting schedules can also help. One example is Timtab, which publishes resources related to parenting schedules and planning.