What is it?
If you have separated from your partner and have care of the child/children from that relationship, you will likely be able to apply for financial assistance from the other parent in the form of child support.
Child support is an ongoing payment from one parent to the other, for the financial benefit of a child from that relationship. The payment of child support represents the recognition that both parents have a responsibility to provide for their children, and makes sure that a child is supported financially by both their parents.
Why do we have child support?
The child support scheme applies to all parents. The parents of a child have the primary duty to maintain the child. The child support legislation goes on to state that the duty of a parent to maintain a child has priority over all commitments of the parent other than commitments necessary to enable the parent to support themselves or any other children that the parent has a duty to maintain.
The principal object of the child support legislation is to ensure that children receive a proper level of financial support from their parents.
Who can apply for child support?
The parent who the child is residing with lodges the application for child support.
Parents of children from same-sex relationships are able to apply for child support provided they are able to reach the legal requirements relating to parentage. Generally these requirements will be reached if the child
- was adopted by the couple
- was conceived by an artificial conception procedure, and the parents were in a de facto relationship at time of conception
- was born through a surrogacy arrangement and there is a court order declaring the couple to be the child’s parents
Non-parent carers may also be able to apply for child support from both of the child’s parents. A non-parent can be someone other than the parent who cares for the child, such as a grandparent, other family member, or a legal guardian. You are able to apply for child support if you care for the child 128 nights or more in the year, and are not in a domestic relationship with either of the parents. This is done by submitting Non-Parent Carer application with the Child Support Agency.
If a parent is receiving a pension or benefit from Centrelink it will be a requirement that that parent make a child support assessment application through the Child Support Agency otherwise the pension or benefit may be limited.
How long does the obligation last?
The obligation to pay child support continues until a child turns 18 years of age, or to the conclusion of year 12 if the child turns 18 in that year of schooling (noting that a specific application must be made to continue the child support through to the conclusion of year 12).
How is child support calculated?
The procedure for paying and receiving child support is governed by the Child Support (Assessment) Act1989 and the Child Support (Registration and Collection) Act 1988.
The Acts provide a mathematical formula for determining how much child support or maintenance you will have to pay, or will receive. Child Support is regulated by the Child Support Agency not by the court.
The actual process of assessing the amount of child support can be quite complex, but in general terms it involves calculating the percentage of care each parent provides, determining if a parent is not meeting their entire share of the costs of the child through such care, then calculating amount of child support they should be paying, based on the combined incomes of both parents and the level of care provided.
Factors that are relevant to determining child support rates include:
- the income of the parents
- how many children are involved
- the amount of time the children spends with each parent
- the level of care each parent provides for the child
- the amount of money each parent needs to support themselves
- Other dependent children either parent has responsibility for
In practical terms the simplest way to work out your child support liability or the payment you are to receive is through the Department of Human Services Child Support Estimator found here. The estimator takes you through the above points and prepares a calculation based on your circumstances.
If you are the parent the children are living with after separation, you will need to lodge an application for child support. This is done through the Child Support Agency not the court system. After lodging your application, you will receive an assessment notice that states how much is to be received/paid each month. You can then choose the most appropriate method for collecting this child support.
How do you pay or receive child support?
There are different methods of organising and managing your child support payments. How you choose to arrange this will largely depend on your personal circumstances, particularly how well you are able to communicate with your ex-partner.
You are not bound by your choice, and are able to change to another arrangement later on if you wish. Importantly, the parent who is receiving the child support needs to agree to the collection method.
Child Support Collection
This involves the Child Support Agency assessing the amount to be paid, and then collecting and transferring that amount between the parents. There is no need for direct contact between the parents, which may be necessary for a variety of reasons. The agency has enforcement options if the payments are not being made, they will also maintain records on the payments and you will be required to inform them about changes in your circumstances.
This allows you to make/collect your child support payments privately. You and the other parent come to an agreement about the most convenient or appropriate payment method for both of you. You still pay or receive the amount the Child Support Agency assessed, but you have the flexibility to arrange the payments whenever and however you wish. You will need to keep your own records of the payment and if payments are not being made you may need to seek assistance to enforce them.
This means you and the other parent decide on the amount to be paid, as well as when and how it should be paid. You manage the payments yourself and do not need to register with the Agency. While this method allows you to have full control over the arrangements, it also means that any unpaid money cannot be collected by the Agency and you are responsible for your own records of payment.
If you and the other parent are not able to communicate effectively, it is probably best for you to organise your child support through the Child Support Agency and to opt for the Child Support Collect method. This may also be a preferable option if either of you need a structure to ensure the payments are made on time.
If you chose to pursue either a private or a self-managed arrangement, you should document your agreement with the other parent in a Child Support Agreement.
What sort of formal agreements regulate the payment of child support?
Aside from a formal assessment by the Child Support Agency there are two types of formal agreements which set out the terms of any child support agreement:
(a) Limited Child Support Agreements
A Limited Child Support Agreement is an agreement in writing setting out the child support arrangements. The child support payable must not be less than the child support which would be paid under an assessment. The Agreement must be accepted by the Registrar of Child Support to be valid. There is no requirement for legal advice when entering into this type of agreement. The agreement operates for a maximum of 3 years.
(b) Binding Child Support Agreements
A Binding Child Support Agreement again is an agreement in writing which sets out the child support arrangements. A Binding agreement differs from a Limited agreement in circumstances where:
- there is a requirement for independent legal advice with a certificate attached to the agreement signed by the lawyer confirming advice has been provided to the person, before the agreement was signed as to the effect of the agreement on the rights of the party and the advantages and disadvantages of entering into the agreement;
- the agreement can be more or less than the amount of child support which would be paid under an assessment;
- the agreement must contain formal requirements set out in the Assessment Act.
The advantages and disadvantages of entering into a child support agreement will always depend on your particular circumstances.
Do child support matters ever go to court?
There are limited circumstances where child support arrangements go to court. Some examples include:
- where the paternity of the child is in dispute;
- if you are in proceedings for property or parenting matters and you want to suspend any assessment process pending the outcome of those proceedings;
- if you have property or parenting proceedings on foot and you need to depart from an assessment which doesn’t take into account your proper circumstances;
- to set aside or vary a child support agreement where the other parent won’t agree to stop or change the arrangements set out in the agreement.
How does child support interact with Centrelink Payments?
If you receive Centrelink payments this may affect the rate at which your child support will be assessed.
There will be a minimum amount payable included in your child support assessment. Parents who pay child support will pay this minimum if they receive income support from Centrelink, have less than regular care of their child and their income is less than a self-supported amount.
A fixed assessment exists for parents who report a low income but do not receive any income support payments from Centrelink.
The figures for minimum and fixed assessments are subject to yearly change and you should check with the Child Support Agency if you think this may apply to you.
If your financial situation changes or you’re unsure about how your child support payments and your Centrelink payments interact you should speak to Centrelink directly.
It is also important to note that outstanding child support can be deducted from Centrelink payments.
Family Tax Benefit
If you received a family tax benefit, and either you or your partner receive child support, the amount of child support will be considered when calculating your benefit.
Centrelink will use your child support agreement to assess the amount of family tax benefit you are eligible for. Then at the end of the financial year they will balance your payments to make sure this assessment was correct when compared to the actual amount of child support you received during the year.
If you received more than the minimum rate of the family tax benefit then you are not able to elect to self-manage your collection of child support.
The calculations and law regulating child support is complex and if you are uncertain about how they will apply to you, or what the best arrangement is for you contact our office to speak to a family law professional.