What you need to know about Child Support

We’ve come up with the seven things you should know about Child Support when you separate.

1.????The CSA’s assessment

The Child Support Agency will assess the amount of periodic child support payable by applying a formula that is based on three key premises:

1.??????The estimated costs of your children based upon the earnings of the parents (less a self-support component), taking into account the ages of the children;

2.??????That the parents should share rateably in the costs of caring for the children;

3.??????The rateable cost sharing is based upon a combination of the level of care (as a percentage) and the level of the parent’s incomes (less the self-support component).

You can access the Department of Human Services’ Child Support Estimator here. This can give you an idea of your estimated child support payments (or what you might be entitled to receive).

2.????Assessment Applicants

To apply for a periodic child support assessment, you must be either a parent or an ‘eligible carer’ of the child. An ‘eligible carer’ is someone who has at least shared care of the child (ie. at least 35% care).

3.????Timing of an application

There is no requirement to seek an administrative child support assessment within a certain time after separation (or birth of a child).?

You can apply for an assessment with the Child Support Agency at any time, provided that you and the potentially liable parent are not living together on a “genuine domestic basis”.

It is worth noting that applying for an administrative assessment from the Child Support Agency may be necessary in order to receive other government benefits, like family tax benefits.

4.????Requirements of a Binding Child Support Agreement

If you and your former partner agree to have child support arrangements that differ from what an administrative assessment from the Child Support Agency might look like, one of the options to document that agreement is through a Binding Child Support Agreement.

Some of the requirements of this type of agreement include[i]:

o??It has to be in writing;

o??The agreement must be signed by the parties to the agreement;

o??The agreement needs to include a statement for each party (as an annexure), that before signing they have been provided with independent legal advice in relation to

§?The effect of the agreement on the rights of the party;

§?The advantages and disadvantages at the time the advice was provided of making the agreement;

o??The agreement needs to include a certificate signed by the lawyers providing the independent legal advice to each of the parties stating the above advice was provided;

o??For the agreement to be valid, it cannot be terminated by another agreement; and

o??After the agreement is signed, either the original or a copy of the agreement was given to each party.

?

5.????Obligation to notify of an Agreement

After entering an agreement or an order is made for the payment of child support, the ‘payee’ has a duty to notify the Child Support Agency of the terms within 14 days.[ii]

The sooner this is done, the less likely it is that a child support debt or arrears will be calculated from the commencement date of the agreement.

6.????Retrospective child support assessments

A child support assessment can be made retrospectively, however usually only date back 28 days or to the date of lodging the application.[iii]

7.????Re-establishment income

It may be helpful to know that the Child Support Agency can give consideration to separated couples through identifying ‘re-establishment income’, so that a parent can keep back some of their income to ‘re-establish’ themselves after separation.

A parent may apply for post separation income to be excluded, by the registrar amending an assessment if:

a.??????The applicant and other parent lived together on genuine domestic basis for at least six months; and

b.??????The separation was:

a.??????Within the past three years;

b.??????Before the application for assessment was made; and

c.??????At the time of the application, the applicant and parent are still separated; and

d.??????The income is ‘of a kind it is reasonable to expect’ would not have been earned in the ordinary course of events.

It will however be limited to:

a.??????A 30% of less reduction of your income;

b.??????A period of three years after your separation; and

c.??????Income that you would not gain in the ordinary course of events – eg. regular pay rises, promotions etc.

?

If you need help to understand your child support entitlements, or to see if a different arrangement can be negotiated that better meets the needs of your family, then get in touch to discuss your options.

?

?

[i] 80C(2) of the Assessment Act.

[ii] Section 23, 33 of the Child Support (Registration and Collection) Act 1988

[iii] Smyth and Smyth (1991) FLC ?92-237.