Child Support Agreements
The law believes that the duty to financial support a child is greater than any other priority save for self-support.
Financial support for children in Australia is generally dealt with by the Child Support Agency or CSA (the Child Support Branch of the Department of Human Services). The CSA carry out what is known as an administrative assessment to determine how much child support is payable and by whom. In general, the CSA looks at the respective incomes of the parents, the number of nights the child spends with each parent and any other relevant financial obligations of a parent (such as the obligation to support another person). There are certain circumstances under which an assessment can be challenged however these are rare.
In determining whether a child support assessment (known as an “Administrative Assessment” is available the Child Support Agency (CSA) needs to firstly determine the following:
- that there is an eligible child (essentially all Australian children or children in Australia at the time of the application apart from those subject to child welfare law);
- who is the eligible carer (either one parent or another eligible carer where the child does not live with a parent); and
- who is the liable parent (the parent by whom payment is required).
Basic principle is to ensure that parents share proportionally in the cost of supporting a child.
The percentage of care of the child provided by each party combined with their respective incomes generally determines the assessment
Subject to either parents’ obligations to other dependent children not the subject of the assessment.
The Child Support Formula is complicated – BUT see the Department of Humans Services child support estimator for a good guide.
- Age of child/children – children under 12 are roughly 20% cheaper and child support usually ceases at 18
- Child Support Income – the ‘Costs of the Children’ are reflective of the incomes of the parents. If both parents’ income does not exceed the self-support amount then it will be nil. There is a cap or maximum parental income above which the costs of the children do not rise.
- Adjusted Taxable Income of each parent – gross income before tax is used in the calculation
- Self-support Amount – an amount subtracted from each parents’ income to account for their own cost of living (currently $25,038)
- Income Percentage Amount – both parents’ incomes are aggregated and the income percentage of each parent is calculated
- Level of Care – or percentage of time the child spends with each parent
- Relevant Dependent Child Allowance and Multi-case Allowance – the other dependent children of a liable parent are taken into account
- The calculation of child support involves multiplying the Costs of the Children by the difference between a parent’s care percentage and income percentage.
Under certain circumstances you can object to an Assessment you do not believe is accurate. This is referred to as a “departure application”. You can object on the basis of the following reasons:
- The information used for the calculation was wrong or old;
- All the relevant facts were not considered;
- Important details were missed; or
- The law was not applied correctly.
You cannot object to a decision based on who is or is not a parent of the child, this must be the subject of an application to the court.
Parents do not have to make arrangements for child support through the CSA. They may also enter into an Agreement by consent. Such an agreement can be made binding by either:
- Binding Child Support Agreement
Both parties must have independent legal advice and there is no requirement that an assessment be in place as a Binding Child Support Agreement will replace a Child Support Assessment. The agreement will list certain ‘terminating events’ but are otherwise difficult to change without agreement between the parents.
- Limited Child Support Agreement
Independent legal advice is not required before entering a limited child support agreement. There must be an assessment in place and the amount payable under the agreement must be in excess of this amount. Limited agreements are much easier to vary or terminate and last for a maximum of 3 years.
- Limited and Binding Child support Agreements can be enforced in the same manner as a Child Support Assessment.
- The Child Support Registrar has the ability to collect directly from the liable parties’ wages or Centrelink payment. They can also intercept tax refunds or other third party payments.
- Ultimately the Registrar can bring proceedings for enforcement including a Departure Prohibition Order which will require payment of outstanding child support prior to leaving the country.
- Note that the Registrar is responsible for enforcing the collection of periodic payments. If non-periodic payments payable under an Agreement require enforcing then this would be the subject of an application to the court.