What Is Child Support?

Child support is a legal obligation that a non-custodial parent is typically required to pay to the custodial parent or guardian to financially support their child.

This financial support is intended to cover the child’s basic needs, such as food, clothing, shelter and utility bills for the house.
Child support is governed primarily by the Child Support (Assessment) Act 1989 that has an underlying principle to ensure that the child receives a proper level of financial support from both their parents even if they are no longer together as parents of a child. Both parents have the primary duty to maintain that child.

Most child support matters in Australia are dealt with through Services Australia who are responsible for assessing and managing child support payments rather than through the Courts.

What Options Are Available For Arranging Child Support?

There following are 3 ways in which you can arrange child support:

1. An assessment with Services Australia.

2. A Child support agreement (Binding or Limited) negotiated between you and the other parent.

3. An informal agreement between you and the other parent.

An Assessment with Services Australia

You may apply for an assessment with Services Australia. They calculate the relevant amount of support that should be paid in accordance with a prescribed formula that takes into account both parent’s income, the child’s ages and the respective parent’s level of care for the child.

Once issued, the amount payable can be paid via Services Australia or you can pay directly to the other parent. The assessment is enforceable by Services Australia against the non-custodial parent.

The amount payable under the assessment is reviewable in the event there are changes to circumstances, for example, if a parent’s income increases or decreases significantly or if there is a change in parenting arrangements.

A Child Support Agreement

The second way you can arrange child support is by an agreement. There are two types of agreement, namely:

1. A Binding Child Support agreement; or

2. A Limited Child Support Agreement.

Binding Child Support Agreement

A Binding Child Support Agreement (“the Binding Agreement”) is a private contractual agreement between parents which can be used to specify, limit or reduce the amount of child support that is required to be paid by the non-custodial parent as calculated by Services Australia.

The Binding Agreement can range from periodic payments of NIL to a specific amount for each child thereby providing more flexibility to the parents. It replaces any assessment made by Services Australia and is unable to be changed in the absence of further agreement, or unless it is suspended, or the Court sets the agreement aside.

This type of agreement is enforceable and requires both parents to obtain independent legal advice.

Limited Child Support Agreement

A Limited Child Support Agreement (“Limited Agreement”) is also a private contractual agreement between parents that can be in place for a period of up to three years. For a Limited Agreement to be accepted by Services Australia:

• you must first obtain a child support assessment before making an application for acceptance; and

• the amount agreed must be for at least the annual rate of child support that would otherwise be payable under the assessment, payable by the same parent as under the assessment.

It can be extended by the parents at their discretion and terminated if there are any changes in circumstances such as a change in one parent’s income.

Limited Agreements do not require you to have received independent legal advice before entering into the agreement.

An Informal agreement

An informal agreement is a verbal or written agreement between the parents which reflects your understanding between one another about how child support will be paid. It is not enforceable.

Whether the informal agreement will work depends entirely on the relationship between the parents and good faith of both parents.

If one of you decides that they are not happy with the current informal arrangements that are made, they can then choose to make a Child Support Assessment with Services Australia.

How Much Child Support Do I Have To Pay And How Is It Calculated?

The child support assessment, agreement or court order sets how much you need to pay. This might be per week, fortnightly, monthly or annually.

Services Australia uses a specific formula to calculate the minimum required amount including applying the following 8 steps:

1. Work out each parent’s child support income
2. Work out the parents’ combined income
3. Work out each parent’s income percentage
4. Work out each parent’s percentage of care
5. Work out each parent’s cost percentage
6. Work out each parent’s child support percentage
7. Work out the costs of child
8. Work out the child support amount

In circumstances where the amount of time you spend with the child (the parent’s percentage of care) is considered when making a calculation, this means that at any point in time if the level of care changes, between you both, then either one of you may approach Services Australia and request that they re-assess the amount.

 What Does Child Support Cover?

There are no set rules or regulations as to what payments can and cannot be used for in Australia.
Ordinarily, child support is intended to cover the child’s basic needs including but not limited to:

• Food including groceries;
• Clothing and footwear;
• Shelter and utility bills for the house;
• Regular school fees such as, uniforms/textbooks, school excursions;
• Healthcare including minor medical expenses such as prescription medication and health insurance.

It is the responsibility of the parent receiving the payment to allocate the funds to the needs of the child.

What Does Child Support Not Cover?

There are, some expenses that are not covered by child support payments. These expenses are typically classified as non-periodic payments including:

• Major Medical expenses: for example, dental work or surgery (including out of pocket gap expenses).

• Optical expenses: such as reading glasses. These are generally shared equally between the parents.

• Private school fees: private school fees differ from regular school fees as they are more costly. They are either shared equally between parties if agreed or 100% by the parent who proposes that the child attend private school.

• Extracurricular activities: such as sports, music lessons or dance classes. These are generally to be covered by the parent who chooses to enrol the child in the activity (unless jointly agreed).

• Personal items: toys and electronic devices. These costs are usually the responsibility of the parent who chooses to purchase them for the child.

• Travel expenses: flights and accommodation (unless both parents agree to share the cost).

• Health insurance: generally, the parent with whom has health insurance work benefits will include the children on their health insurance and bear 100% of the costs for the child’s health insurance.

How Do I Pay Child Support?

There are various ways in which child support payments can be made including:

1. Private collection: this is where the non-custodial parent directly pays the agreed or assessed amount to the custodial parent in an agreed manner.

2. Child Support Collect: This is where Services Australia will manage the collection of the payments from the non-custodial parent to the custodial parent via arranging payment from their employer, bank transfers or credit card.

3. Employer: The non-custodial parent or Services Australia can arrange for payments to be debited directly from the non-custodial parent’s salary or wages and paid to the custodial parent.

How Often Do I Have To Pay Child Support?

You can choose how often you pay. This can be weekly, fortnightly or monthly. The payments you make are for the past week, fortnight or month and not made in advance.

When Do I Stop Paying Child Support?

In Australia, the obligation to pay child support generally continues until the child turns 18. At this point, the child is considered an adult, and the legal responsibility for financial support usually concludes.

In addition, if any of the following occur, child support payments will end:

• The child passes away;

• The parent paying passes away;

• The child marries or enters into a de facto relationship; or

• The child is adopted.

For more information about Child Support, visit https://www.servicesaustralia.gov.au/individuals/child-support

Need help navigating Child Support?

Should you have any concerns about your rights and obligations in relation to payment of Child Support, contact our office for assistance.

Our team of Family Lawyers can assist with preparing Binding Child Support Agreements and negotiating Financial Settlements.

It is our mission to deliver clear, timely and relatable advice for all our clients, and to make you fell. Safe Supported, Reassured

Contact us, email info@cominoslawyers.com.au or call 02 8999 1800.

Disclaimer

The information contained in this article is intended for general information only and is not to be relied upon as legal advice.