What is Child Support?
If you have just separated someone may have mentioned child support to you. Whether you might be paying or possibly entitled to it, it’s important that you know what it is – sooner rather than later. Here are some quick tips.
The process of deciding who pays child support can be complicated. To safeguard the best interests of children, the court considers a range of factors. To help you through this process, the following information will allow you to better understand Australia’s child support laws.
What Is Child Support?
Child support is a form of financial support designed to help parents cover the costs of day-to-day care. The parent who pays child support is known as the ‘payer parent’ while the recipient is referred to as the ‘payee parent/carer’.
Child support amounts can vary depending on how much money each parent makes and the child’s living arrangements. The Department of Human Services (formerly the Child Support Agency) is responsible for overseeing child support payments.
Different Types of Child Support
Depending on their unique situation, families can receive different types of child support payments. Most payments fit into one of the following categories:
- Periodic payments – Regular payments involving similar amounts of money. Usually determined by the child support formula and paid via the Child Support Agency.
- Non-periodic payments – Non-periodic payments can be used to pay for expenses like school fees. These type of payments can be partially made within the formula assessment, but more usually by agreement.
- Lump-sum provision – Paid as a credit balance, the court must decide what percentage of a lump-sum provision can be used to cover ongoing costs. A court order of this type is unusual, more commonly an order of this nature would be by agreement.
These are the most common categories of child support, although other types of payments do exist. For example, it’s not uncommon for parents to make non-cash transactions by exchanging property however an agreement for this to be credited to child support should be clearly documented. Payments can also be made to a third party to cover a child support debt.
How is Child Support Calculated?
Unless separated parents can come to a private agreement, child support amounts are calculated by the Department of Human Services using the following 8-step formula:
- Each parent’s taxable income is calculated.
- These incomes are added together to determine a combined child support income.
- Each parent’s income percentage is calculated by dividing their incomes by the combined total.
- Using the care and cost table, each parent’s cost percentage is calculated.
- Each parent’s percentage of care is calculated.
- Each parent’s cost percentage is subtracted from the income percentage. This calculation determines which parent will receive child support. The parent with a negative percentage receives child support, while the parent with a positive percentage pays child support.
- The costs for the child are then worked out using the costs of children
- The total amount of child support is decided by multiplying the positive child support percentage by the costs of the child.
This formula only applies to parents with one child support assessment. The process for parents with multiple assessments is similar, but the formula is a little more complicated.
Either parent can apply for a child support assessment. When an application is accepted, both parents will be notified of the calculations and amounts involved. Before an application can be accepted, the Department of Human Services must be satisfied that both parents mentioned in the assessment are the legal parents of the children involved.
Can a Child Support Assessment Be Opposed?
If you don’t agree with a child support assessment, you can request the Department of Human Services to review it. You should only oppose the assessment if you think incorrect information may have influenced the department’s decision.
To oppose the decision, you will need to file an Objecting to a Child Support Decision form. You must submit this form to the Department of Human Services within 28 days of receiving the department’s decision letter. If you do not live in Australia, this timeframe is extended to 90 days.
Enforcing Child Support
If the payer parent fails to meet their financial obligations, the payee parent/carer must notify the Department of Human Services. The department has the power to take child support out of the payer parent’s salary or tax return. The parent owed child support can personally (if they wish) pursue enforcement for the outstanding debt. Parents with significant child support arrears may also be prevented from leaving the country.
To avoid confusion and to be clear on your rights speak with one of our experienced family lawyers contact our Brisbane office today. Call us on (07) 3221 4300 to organise a no-obligation initial appointment at a fixed-cost of $330 Incl. GST. We will be happy to assist you in person, over the phone or by Skype.