Child Support is a monetary payment made by one parent to another, after the parent’s relationship has ended. It is designed to aid one parent in covering the daily expenses associated with raising a child.
Relevant Legislation and Government Agencies
There are two major pieces of legislation that govern Child Support Payments. These are:
- The Child Support (Assessment) Act 1989; and
- the Child Support (Registration and Collection) Act 1988.
These two pieces of legislation have developed a system of administrative review of child support assessments, which is largely dealt with by a government agency known as the Child Support Agency.
The Child Support Agency employs a formula to determine how much child support is a parent is to pay. This calculation, known as a “child support assessment,” is designed to determine the financial responsibilities of each parent.
Typically, the parent with the higher income and the lesser percentage of care is responsible for paying child support. However, due to the system’s complexity, scenarios may arise where parents share care equally, yet the higher-earning parent is obligated to make child support payments to the other.
In situations like these, where the assessment seems inequitable, seeking a review of the child support assessment is an option. It is advisable to consult with a lawyer to explore and understand the available options in such cases.
Child Support Assessment Process
A child support assessment is initiated when one parent contacts the Child Support Agency, typically following separation or when applying for a single parent pension, family tax benefit, or through a court application. This assessment is crucial for receiving full pension or family tax benefits, and it’s advisable to contact the Child Support Agency promptly after separation to avoid affecting other Centrelink or family tax benefits.
How does the Child Support Agency calculate Child Support Payments?
Broadly speaking, the agency employs an 8-step approach to determining child support payments. It is worth noting that Child Support generally, is a complex legal topic and this article is not designed to be a comprehensive and complete discussion of the topic. If you have a legal problem regarding child support, it is important that you speak to a Family Lawyer for advice.
The eight steps to calculate child support:
- Work out each parent’s child support income
- This is each parent’s taxable income (plus any net rental loss and fringe benefits) less the “parenting self-support amount” which is $27,508 in 2023 (indexed annually).
- If a person has other dependent children or more than two child support assessments, a deduction is made at this step.
- Work out the combined child support income
- The combined child support income is the child support income of the parents added together.
- Work out your income percentage
- By combining the child support income at step 2, each parent’s child support income can be viewed as a percentage.
- Work out your care percentage.
- A parent’s care percentage is based on the number of nights in a 365-night calendar year the child lives with each parent.
- 5 Work out your cost percentage.
- Each party’s cost percentage is calculated from their percentage of care (step 4), using this table in s 55C of the Child Support (Assessment) Act 1989.
| Care percentage | Cost percentage |
|---|---|
| Nil to less than 14% | Nil |
| 14% to less than 35% | 24% |
| 35% to less than 48% | 25% + 2% for every % > 35% |
| 48% to 52% | 50% |
| More than 52% to 65% | 51% + 2% for every % > 53% |
| More than 65% to 86% | 76% |
| More than 86% to 100% | 100% |
- Each parent’s income percentage (step 3) minus their cost percentage (step 5) represents their child support percentage.
- If the child support percentage is positive, you need to pay child support – the liable parent.
- If the child support percentage is negative, you are entitled to receive child support – the parent entitled to child support.
- Work out the cost of your child
- This is calculated by the table in Schedule 1 Child Support (Assessment) Act 1989
- http://classic.austlii.edu.au/au/legis/cth/consol_act/csa1989294/sch1.html
- Work out the child support amount
- Finally, multiply the liable parent’s child support percentage (step 6) by the cost of the child (step 7).
Binding Child Support Agreement
Alternatively, parents can mutually agree on the child support amount, documented in a Binding Child Support Agreement.
This agreement specifies the agreed-upon child support amount, including details like weekly payments and additional considerations such as private health insurance or school fees. Such agreements may supersede the Child Support Agency’s assessment.
To establish a binding Child Support Agreement, it is necessary to engage a top family lawyer who will guide you through the agreement and ensure you understand its implications. Your ex-partner must also seek independent legal advice. These agreements are challenging to overturn if circumstances change, emphasizing the importance of legal counsel before finalizing such arrangements.
Child support payments can be either directly made to your ex-partner or deducted from your salary by the Child Support Agency. When making direct payments, maintain a comprehensive record of transactions, avoiding cash payments. Documentation is crucial in case of any disputes, allowing you to demonstrate to the Agency the payments made and their respective dates.
In situations where your ex-partner fails to fulfill the assessed payment, you have the option to file an application with the Federal Circuit and Family Court, seeking orders for your ex-partner to meet the child support obligations. However, it’s essential to note that the law governing such applications are specific, and seeking legal advice is strongly recommended before contemplating such a step.
For more information on child support, you can go to the Child Support Agency’s website at:
https://www.humanservices.gov.au/customer/services/child-support/child-support-assessment
It’s important to seek legal advice before engaging in a discussion regarding child support with your ex-partner. You should always get advice from the best family lawyers. Barker Evans provides expert child support advice, and we are located in the heart of Sydney CBD. We have considerable experience with providing advise relating to child support and drafting Binding Child Support Agreements.
If you want advice from an expert family lawyer, please do not hesitate to contact us on (02) 8379 1892 or info@barkerevans.com.au.
