WHAT IS CHILD SUPPORT?
Child support payments are payments made by one party to the other to help with the cost of supporting the children. Child support is an ongoing process and is separate from: property settlement, parenting orders and divorce.
Parents are responsible for the financial support of their children and this responsibility is not changed by:
- separation and divorce;
- where the child lives or the amount of time they spend with each parent;
- the remarriage of one or both parents.
WHAT IS THE DIFFERENCE BETWEEN PROPERTY SETTLEMENT, PARENTING ORDERS AND CHILD SUPPORT?
You are able to apply to the Family Court of Australia (“the Court”) to have your property and parenting orders approved, but it is the Department of Human Services that is responsible for administering Australia’s child support scheme.
Property settlement (how your property is divided) can happen at any time from the date of separation until 1 year after a divorce for married couples or 2 years from date of separation for de facto couples. It is a one-off process.
Parenting orders detail the parenting arrangements for the children.
Child support provides children with an appropriate level of financial support from separated parents.
WHAT AGE IS CHILD SUPPORT PAID UNTIL?
Child support is usually paid until a child turns 18.
There are some situations where child support may be stopped early and others where it can continue to be paid for a child over 18.
Child support may be stopped before a child turns 18 if any of the following apply:
- the child becomes self-sufficient;
- the child marries or enters into a de facto or marriage like relationship;
- the child is adopted;
- the child dies.
If a child over 18 cannot support themselves, the parents can agree to provide financial support or the court can make an order for the parents to continue to provide financial support, called adult child maintenance, because:
- the child is completing their secondary or tertiary education;
- the child has a mental or physical disability.
CHILD SUPPORT OPTIONS?
There are a number of child support options available to parents, so first step is for you to consider your family circumstances and decide which option you think will best suit your situation.
The 4 options for child support are:
- Self management;
- Child support assessment;
- Child support agreement;
- Court ordered child support.
If the parents are managing co-parenting in an amicable manner and neither of the parents receive Family Tax Benefit Part A, they will often choose to self-manage their child support arrangements. If parents are managing co-parenting in an amicable manner and one of them is receiving Family Tax Benefit Part A, they will often choose to apply for a child support assessment and apply for Private Collect.
No matter which child support option parents choose, they can still contact the Department of Human Services for information and can always change their preferred method of child support assessment and collection, if their circumstances change.
CHILD SUPPORT AND FAMILY TAX BENEFIT PART A
Child support payments and Family Tax Benefit Part A are closely linked.
If parents are applying to receive or are receiving Family Tax Benefit Part A, they are required to apply for a child support assessment with the Department of Human Services. The reason for this is that, where possible, parents should take primary responsibility for the cost of supporting their children. Therefore, the amount of Family Tax Benefit Part A that will be paid after parents have separated, will take into account the child support assessment done by the Department of Human Services.
If the amount of child support a parent receive changes, then the Family Tax Benefit payments may change too.
CHILD SUPPORT CALCULATOR
The Department of Human Services provides some excellent tools to assist parents in considering their child support options. A good starting point for parents is to work together to complete the child support estimator to get an indication of the amount of child support that will be required to be paid, for their particular situation.
If parents are not able to work together to complete this estimator (and share the results) or if either parent is concerned that there has not been full disclosure of income earned when completing the estimator, then applying for a child support assessment would be the next pragmatic step.
Child support amounts can be determined in 2 ways:
The child support amount payable can be determined either by the parents under self-management or by the Department of Human Services by a child support assessment. If parents self-manage they arrange their payments on their own. If a child support assessment is done, then the person who will receive the child support is to advice the Department of Human Services whether they wish to receive it by Private Collect or Child Support Collect.
1. Parents can make a child support agreement
You and your ex-partner can decide how you want to manage your child support – you can decide how much, when and how to pay child support; this method is commonly classified as self-management. You decide on the child support amount and how to pay it and do not need to involve the Department of Human Services. You cannot use self-management if you receive more than the base rate of Family Tax Benefit.
You can make a child support agreement on your own. This is a formal agreement between parents. The two agreement types available are:
- Limited child support agreement; and
- Binding child support agreement.
You and the other person may agree to:
- cash payments, or
- non-cash items such as health insurance and school fees, or
- a combination of cash payments and non-cash items.
If self-management ceases to work out for you, then you can apply to the Department of Human Services for a child support assessment.
2. Parents can apply to the Department of Human Services (Child Support) for a child support assessment.
Parents can apply to the Department of Human Services for a child support assessment.
A child support assessment uses a set formula to determine how much child support is to be paid, based on each parent’s income and the care arrangements for the children.
HOW CHILD SUPPORT IS PAID
Once a child support assessment has been completed and accepted by both parents, the person receiving the child support payments can ask for the payments to be made in 1 of 2 ways:
1. Private Collect
This is when you and your ex-partner set up payments in a way that works for both of you without involving the CSA.
Details might include: the frequency and amount of payments and the method of how the payments will be made (e, cash, bank transfer, salary deduction etc).
This option works well for parents that can talk and agree on timing of payments and can rely on payments being made on time and in full (as agreed).
It is a good idea to put this in writing and both sign it. It is also a good idea to keep records of every payment made in case the CSA needs to get involved in the future.
2. Child Support Collect
This is when the CSA: set, collect and transfer, the child care payments for each of you on a monthly basis.
The CSA will collect the payments from the paying parent and transfer them to the receiving parent. The receiving parent can apply for Child Support Collect.
The CSA can also make arrangements with the Payer’s employer to have child support payments deducted from their salary.
CHANGING THE CHILD SUPPORT ASSESSMENT IN SPECIAL CIRCUMSTANCES
It is possible to apply to have your child support assessment changed in special circumstances, but this is an administratively time consuming and often overwhelming and drawn out exercise, so such a decision needs to be carefully considered, with the cost (emotional and time cost) and benefits (net financial benefit applied for) assessed.
Once the Application to change your assessment – Special Circumstances form and required evidence has been submitted, the application will be sent to the other parent so they can respond and provide their evidence or requested changes. The Department of Human Services assesses all of this information and then makes their decision and will advise each of the parents in writing of their Notice of Decision.
Either parent can apply to have their child support assessment changed, if they can show that they can satisfy at least one of the following 10 reasons.
- The costs of raising the child are significantly affected by the high costs of spending time or communicating with the child.
- The costs of raising the child are significantly affected because of their special needs.
- The costs of raising the child are significantly affected because the child is being cared for, educated or trained in the way both parents intended.
- The child support assessment is unfair because of the child’s income, earning capacity, property or financial resources.
- The child support assessment is unfair because you’ve paid or transferred money, goods or property to your child, the receiving parent or a third party, for the child’s benefit.
- The costs of raising the child are significantly affected by the parent or non parent carer’s child care costs, and the child is under 12 years of age.
- Your necessary expenses significantly reduce your capacity to support the child.
- The child support assessment is unfair because of the income, earning capacity, property or financial resources of one or both parents.
- Your capacity to support the child is significantly reduced because of:
- your duty to maintain another person or child
- the special needs of that person or child, or
- the costs of spending time with or communicating with that person or child.
- Your responsibility to support a resident child significantly reduces your capacity to support another child.
For more information on Child Support options go to: https://www.humanservices.gov.au/individuals/subjects/your-child-support-options
Divide – Simple Financial Separation (“Divide”) does not provide legal advice, we are Chartered Accountants.
This is general information only and does not constitute advice which may be relied upon.
Please contact Divide on 07 3367 5380 or via email at firstname.lastname@example.org to discuss your specific situation.