Child support is governed by the Child Support (Assessment) Act 1989 (“the Assessment Act”) and is generally administered by Services Australia (Child Support) or as it was previously known as the “Child Support Agency”.
There are a number of options in relation to the way you may receive or pay Child Support.
An Administrative Assessment made by Services Australia can be obtained by either parent to ascertain the amount of child support either parent is to receive or pay. The amount of child support payable pursuant to an Assessment is calculated using a specific formula set out in the Assessment Act.
The complex formula takes into account
both parents’ income;
the costs associated with raising children;
the time the children spend with each parent; and
the share of the child’s cost that each parent pays.
It can also take into account a parent’s financial responsibilities for other children from either previous or new relationships, amongst other things.
The way that Services Australia determines the basic formula (used for most people where there is only one assessment and no other dependent children) is rather complex but can be summarised as follows:-
Calculate each parent’s “child support income” which is adjusted taxable income minus a fixed, self-support amount. The current self-support amount is $26,319;
Add both parents’ incomes together to obtain the “combined child support income”;
Divide each parent’s individual child support income by the combined child support income to obtain an “income percentage” for each parent;
Determine each parent’s “care percentage” of the children and each parent’s “cost percentage” for the children.
The cost percentage is then subtracted from the income percentage for each parent. The result is called the “child support percentage”.
Change of Assessment
Once an administrative assessment has been made under the formula, either parent may apply to have the assessment reviewed if they are not satisfied with it.
The grounds upon which Services Australia and/or the Court will consider changing a formula assessment include:-
That the capacity of either parent to provide support is reduced because of:-
Their duty to maintain another child or person;
The commitments of the parent to support him or herself; or
The high costs involved in enabling the parent to spend time with or communicate with the child or any other child or another person that the
That the costs of maintaining the child are affected because of:-
The high child care costs of the child;
The special needs of the child; or
The costs associated with educating or training the child in a manner that was expected by the parents.
The income, earning capacity, financial resources and property of the child and/or each parent.
Even if one of the above grounds is made out, Services Australia and/or the Court must also be satisfied that it would be “just and equitable” taking into regards the child, the carer entitled to child support and the liable parent; and also that it would be “otherwise proper” to make the departure order.
The Assessment Act does allow for payments to be made by a parent to a third party, (i.e. a private school) these are known as Non-Agency Payments, in lieu of payments being made directly to the other parent.
In the event parents do not agree upon payments being made to a third party in lieu of the payment of the assessment, credit will only be given for an amount up to 30% of the annual assessment rate. Where a payment is made to a third party, without the other parent’s consent, only specific items prescribed under the relevant legislation can be credited by Services Australia towards the payment of a child support liability.
These specific items can be for child care costs, school fees, school expenses, essential medical and dental items, the other parents share of rent or mortgage payments, utilities and rates and some motor vehicle costs.
Services Australia will only credit non-agency payments if the paying parent has less than 14 percent care (52 nights a year) of the child of the assessment. This is because the formula is adjusted accordingly and it is reflected in the assessment.