What is Child Support?

The Child Support system is an Australian Government initiative created to ensure that, after the separation or divorce of their parents, children receive the financial support they need from both parents. The system aims to support children’s wellbeing and reduce the financial burden on single-parent families. The Child Support (Registration and Collection) Act 1988 (Cth) and the Child Support (Assessment) Act 1989 (Cth) legislate child support assessment, calculation and enforcement.

What is the Assessment Process?

The Child Support Agency (CSA) assesses both parents’ income. This includes bonuses, salaries, wages and other forms of income. The CSA relies on the parents’ latest tax returns and income information to calculate each parent’s ability to contribute financially to raising their children.

The CSA uses a standard formula to calculate each parents’ child support obligations. The formula considers:

• both parents’ income
• the number of children in need of support
• the costs of raising children as determined by the Australian Bureau of Statistics
• whether the child has special needs
• the amount set aside for living expenses for each parent
• the percentage of care each parent provides. This means, for example, if one parent cares for the children for more nights, they may have a lower financial obligation. Stepparent income is not included.

Parents receiving payment must apply for an assessment and their support payments are calculated according to the amount of child support paid. Exceptions are available, for example, in cases involving family violence. The information provided to Services Australia (CSA) determines the amount of Family Tax Benefit.

If circumstances change, parents can request reviews and adjustments to their child support assessments. Changes in circumstances might include changes in employment or income, or changes in the children’s care arrangements and time with each parent. The CSA has internal processes to deal with appeals, changes of circumstance or reviews.

The child support amount varies based on how much time each parent spends with the children. The CSA recognises the benefits to children of spending time with both parents (where it is safe to do so), and so the CSA incentivises shared care arrangements. The Child Support system allows for changes in payment amounts based on the care schedule agreed by the parents.

What does Child Support Cover?

While the legislation and advice from the CSA creates the perception that the assessed amount covers all expenses and is the total financial obligation for paying parents, in reality, the assessed amount is set low and does not meet all of the expenses involved in raising children.

What types of Child Support Payments are available to parents?

There are three options for parents:

1. a child support assessment and private collect
2. a child support assessment and Child support collect
3. self-managed child support. Parents can opt to pay child support between themselves, directly. This is a more informal option and requires mutual agreement on the amount and frequency of payments.

Many parents use the assessed amount as a base and then negotiate to share other agreed expenses. Expenses that can be shared may include school fees, extra-curricular activities, medical and dental expenses, field trips, specialist equipment such as golf clubs or musical instruments, etc.

If the paying parent has less than 14% care of the children, then 30% of the assessed amount can be paid in ways other than a direct payment, such as school fees or on the mortgage.

When there are circumstances of high conflict or family violence, then it is likely preferable to accept the assessed amount and let the Child Support Agency collect.

Parents can estimate their Child Support Assessment here:

https://www.servicesaustralia.gov.au/individuals/topics/online-estimators/28456

If parents cannot agree on Child Support payments or one parent does not comply with direct payments, the CSA can collect payments and transfer them to the receiving parent.

What about compliance with Child Support payments?

The CSA has several means of enforcement to make sure that parents pay child support, including:

• garnishing wages directly from an employer;
• withholding social security payments or tax refunds;
• placing liens on property and issuing departure prohibition orders, in severe cases of non-compliance; and
• in extreme cases, legal action.

What is the role of the CSA?

The CSA:

• provides resources and information to assist parents to understand their child support rights and obligations;
• conducts assessments based on information provided by both parents and calculates the amount of child support due to be paid based on a formula;
• collects and distributes child support payments, making sure that payments are made to the relevant parent;
• assesses the financial capabilities of the parents, with a view to providing a certain, predictable financial environment for the children of parents who have separated; and
• assists and ensures parents meet their financial responsibilities regarding their children post-separation.

Child Support Agreements

The Child Support Agreement must be accepted by a Child Support Registrar through the CSA to override the obligation to pay periodic child support. Parents must check with Centrelink and/or the CSA to determine the impact of any child support agreement on their Parenting Payments and Family Tax Benefits. To receive child support through a child support agreement, the parent must have at least 35% care of a child. Private collect or Child Support Collect can still apply.

There are two kinds of Child Support Agreements: Limited Child Support Agreements and Binding Child Support Agreements.

Limited Child Support Agreements

Limited Child Support Agreements require a child support assessment to be in place and the agreement must provide for equal to or more than the assessed amount. A Limited Child Support Agreement cannot be changed, but, after 3 years, can be ended in writing, by a court, or if there is a change in circumstances. There is no requirement for independent legal advice, or a Legal Certificate to begin or end the agreement.

Binding Child Support Agreements

Binding Child Support Agreements require legal advice and a legal certificate to begin and end the agreement. There is no requirement for a child support assessment and can be for more or less than the assessed amount. Binding Child Support Agreements can include mechanisms to modify the amount payable if care of the child changes or there are changes in circumstances. Binding Child Support Agreements cannot otherwise be amended.

Information about child support can be found here:

https://www.servicesaustralia.gov.au/individuals/subjects/parents-guide-child-support

Understanding the child support is essential for protecting your family’s financial stability, particularly during challenging stages like separation or property settlement.

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Useful Links

Australian Government, ‘Care Percentage Estimator’ (Webpage) <https://www.servicesaustralia.gov.au/child-support-care-percentage-estimator?context=21911 s

Australian Government, ‘Child Support Assessment’ (Webpage) <https://www.servicesaustralia.gov.au/child-support-assessment>

Australian Government, Services Australia, ‘Learning about Child Support’ <https://www.servicesaustralia.gov.au/learning-about-child-support?context=60015>

Australian Government, ‘The Assessment Formula’ (Webpage) <https://www.servicesaustralia.gov.au/child-support-assessment-formula?context=21911>

The Child Support (Registration and Collection) Act 1988 (Cth)

Child Support (Assessment) Act 1989 (Cth)