WHAT IS CHILD SUPPORT?

Child support (or child maintenance) is an ongoing, periodic payment made by a parent for the financial benefit of a child.

Child support payments can be transferred between parents by a private arrangement or by agreement. Alternatively, the parent who receives the payments can ask the Department of Human Services, Child Support Division (“the Department”) to collect the money on their behalf.

WHO PAYS CHILD SUPPORT?

Both parents have an obligation to financially support their children. It doesn’t matter whether the parents are separated, divorced, or even if they never married or lived together. If parents do not live together then it is likely that one parent will be eligible to receive child support.

Child support in Australia is primarily paid by the noncustodial parent, also known as the paying parent. The paying parent is the parent who does not have the primary day-to-day care and custody of the child or children. In most cases, this refers to the parent who spends less time with the child or has fewer responsibilities for their daily care.

It is important to note that both parents have a legal obligation to financially support their children, regardless of their relationship status or whether they were married, in a de facto relationship, or never lived together. The child support system aims to ensure that both parents contribute their fair share toward the upbringing and well-being of their children.

In cases where shared care arrangements exist, and both parents spend a relatively equal amount of time with the child, It’s liability may be adjusted accordingly based on specific factors, such as each parent’s income and the percentage of care provided.

WHEN CHILD SUPPORT IS PAYABLE?

Child support in Australia is payable in the following situations:

When the child’s parents do not live together on a genuine domestic basis: It becomes applicable when the parents are separated or no longer living together as a couple in a genuine domestic relationship. This includes cases of divorce, separation, or the end of a de facto relationship.
When the child is under the age of 18 years: Child support payments are generally required until the child reaches the age of 18. This ensures that financial assistance is available to support the child’s upbringing and well-being during their formative years.
When the child is not a member of a couple: It is applicable when the child is not involved in a relationship as a couple. This means that if the child is single and not married, their eligibility for child support is established.
When the child is a resident of Australia or from a reciprocating jurisdiction: It’s payments are made when the child is a resident of Australia or when both the child and the parent eligible to receive child support are residents of a country from a reciprocating jurisdiction. This ensures that child support arrangements are enforceable and effective, even when international elements are involved.

It is important to understand that these criteria form the basis for determining the eligibility and applicability of child support in Australia.

HOW DO I APPLY FOR CHILD SUPPORT?

Contact the Department of Human Services (DHS): The DHS is responsible for handling child support assessments. You can reach out to them either online or by calling their helpline.
Request a Child Support Assessment: The first step in the process is to request a child support assessment from the DHS. This assessment will determine the amount of child support to be paid.
Provide Relevant Information: During the assessment process, you will be required to provide information about your family circumstances. This may include details about the costs involved in raising your children, the income of both parents, and the percentage of time each parent spends caring for the children.
DHS Assessment: The DHS will utilize a formula that takes into account various factors such as the costs of raising children, parental income, and the time each parent spends with the children. This formula ensures a fair and flexible approach to calculating it.
Notification of Assessment: Once the assessment is completed, you will receive a notification that outlines the amount of child support to be paid. This notification will specify the payment frequency and the due dates.
Payment Options: The DHS provides various options for making it’s payments. You can choose to make the payments directly to the other parent or opt for the DHS to collect and transfer the payments on your behalf.
Review and Reassessment: If you or the other parent disagrees with the assessment, you have the right to request a reassessment. This may be necessary if there are significant changes in your circumstances, such as income variations or changes in care arrangements.

Remember, It is a legal obligation, and it is crucial to comply with the assessment and payment requirements. By following the necessary steps and engaging with the DHS, you can establish a fair and consistent child support arrangement that ensures the financial well-being of your children.

HOW IS IT CALCULATED?

Child support in Australia is calculated using a complex formula called the “basic formula.” Here’s an overview of how it works:

Concept and Method:

Each parent is responsible for meeting the costs of children.
Costs depend on the number and ages of children.
Higher-income parents are required to contribute more.
Credit is given to the parent who covers expenses while caring for the child(ren).
It is paid when the Income % (share of combined income) is greater than the Cost % (credit for time with the child(ren)).

Information Used for Calculation: It is calculated based on the following information:

Taxable incomes of parents
Percentage of nights each parent has the child(ren)
Number of children aged < 13 and number aged 13-17
Information on any other dependents.

Parent Incomes:

Taxable income is used, which is the gross income reported to the Australian Taxation Office (ATO) before tax deductions.
Each parent has a Child Support Income, which is the taxable income minus the self-support amount and costs of any dependents.
The self-support amount is one-third of annualized Male Total Average Weekly Earnings (MTAWE).

Costs of the Children:

The Costs of the Children measure captures the financial costs of raising children.
It considers the number and ages of children.
Costs increase with the incomes of the parents.
There is a cap on the Costs of the Children when the Parents’ Combined Child Support Income reaches a certain threshold.

Income Shares:

Income % is calculated for each parent by dividing their Child Support Income by the Parents’ Combined Child Support Income.
Income % represents the share of the Costs of the Children that must be covered by the parent through payments or care.

Cost Shares:

Cost % is determined based on the Care %, which represents the proportion of nights in a year the parent has custody of the child(ren).
The Care and Cost Table is used to determine the Cost %, which can differ from the Care % due to bends in the cost function.

Calculation of Child Support:

It is calculated by multiplying the Cost of the Children’s value by the difference between the Cost % and Income %.
The Department of Human Services (DHS) is responsible for determining child support and notifying the parties of the payment amount.

It’s important to note that assessments can be reviewed or altered to account for special circumstances through a Change of Assessment review conducted by the DHS.

Understanding how It is calculated helps parents navigate their financial responsibilities and ensures the well-being of their children.

WHAT IS A CHILD SUPPORT AGREEMENT?

A child support agreement is a legally binding agreement between parents or caregivers that outlines the financial support arrangements for their children. It is an alternative to the standard assessment conducted by the Department of Human Services (DHS) in Australia. A child support agreement allows parents to agree on their own terms regarding the amount and method of It’s payments.

There are two types of child support agreements in Australia:

Limited Child Support Agreement: A limited child support agreement is a written agreement between the parents that can be made without the involvement of the DHS. It must meet certain legal requirements and be signed by both parents. This agreement can specify the amount and frequency of It’s payments, as well as any additional expenses to be covered.

To be valid, a limited child support agreement must ensure that the agreed-upon payments meet the child’s financial needs and are at least equal to the amount that would have been payable under the DHS assessment. It is important to note that this type of agreement can be replaced or terminated at any time by mutual consent or by applying to the DHS.

Binding Child Support Agreement: It is a more formal and comprehensive agreement that requires legal advice and the involvement of a lawyer. It provides a higher level of certainty and permanence, as it can only be altered or set aside by a court order or by creating another binding child support agreement.

To create a binding child support agreement, both parties must obtain independent legal advice and have a certificate from their respective lawyers confirming that advice was received. This agreement allows for more flexibility in determining It’s arrangements, including provisions for additional expenses, educational costs, or special circumstances.

It’s important to understand that both types of child support agreements have legal implications and should be carefully considered. Seeking legal advice is highly recommended to ensure that the agreement is fair, enforceable, and in the best interest of the children involved.

Child support agreements provide an opportunity for parents to have more control and flexibility over their child support arrangements. However, it’s crucial to keep in mind that child support agreements should prioritize the well-being and financial support of the children.

CAN THE COURT ORDER CHILD SUPPORT?

In limited circumstances, the Family Court or the Federal Circuit Court may make an order for child maintenance. For example, the court can make orders in relation to a child who is over 18 who has a mental or a physical disability or where a child is seeking further education.

In some circumstances, parents can obtain a child support departure order. When making departure orders, the Court will consider if:

there are grounds for departure from the child support assessment; and
whether it would be just and equitable or otherwise proper to make such orders.

There are a number of grounds of departure, such as high costs involved in enabling a parent to spend time or communicate with the children (for example, where the parents live far away from each other), or the costs of maintaining the child are significantly affected because of special needs of the child/children (for example such as medical needs). In some instances, the court may order the payment of private schooling (for example where the parents have agreed that the children should attend private schools). There are other grounds for making departure orders.

HOW CAN WE HELP?

For separating couples, coming to an agreement on child support can be a difficult process. From experience we find that approaching these issues with a basic knowledge of how the child support system operates can be of great assistance in working towards an arrangement both parties are happy with. Contact us to get legal consultation about this.