Child Support
At law, each parent has the obligation to financially support their children, until they attain the age of 18 or conclude their secondary education, to the extent that each of them has the financial capacity to do so.
Child Support Formula (Assessment)
The child support system in Australia is now managed by Services Australia (Child Support). You might hear this referred to as the ‘Child Support Agency’. Services Australia assesses the rate at which child support is payable and effects the transfer of child support payments from the payer to the payee (when it is not paid directly or privately between parents). It has broad enforcement and collection powers, if child support is not paid regularly and on time. Services Australia communicates and shares information with Centrelink and the Australian Tax Office.
A person who is responsible for the care of a child of the relationship is eligible to receive child support. A parent of the child is liable to provide child support (this excludes step-parents).
The child support legislation includes a basic formula, which calculates the rate at which child support must be paid. The formula uses the parents’ incomes, the number of nights that each parent spends with the child on a regular basis, and the costs of caring for the children (based on a table that is included in the legislation). Those costs represent an average of costs for all children, in diverse socio-economic sectors of the Australian community. They are intended to cover the child’s basic needs, reasonable and necessary living expenses and education costs.
You can obtain an estimate of the child support that you may be entitled to receive and or liable to pay, using the online calculator:
Both parents have the right to have the assessment reviewed and or to apply for a Court Order (called a departure order) if, because of special circumstances, the assessment does not provide a proper and adequate level of financial support for the child would result in an unjust or equitable outcome.
Child Support Agreement
Parents can reach an agreement about child support which is different or in addition to the Child Support Formula.
Parents often enter into agreements to set a fixed rate of child support (which will not fluctuate from time to time, based on changes in their respective incomes) and/or to provide for the payment of third party expenses such as private educations costs, private health cover and extra-curricular activities. Parents do not have a legal obligation to contribute to those expenses, unless the obligation is created by a Child Support Agreement or Court Order.
There are two types of Child Support Agreement; a Binding Child Support Agreement or a Limited Child Support Agreement. We will advise you about which of the two options might be the best fit for your case.
Binding Child Support Agreement
A Binding Child Support Agreement is in writing and signed by both parents. In order to be binding and enforceable, both parties must receive independent legal advice as to the nature and effect of the agreement and the advantages and disadvantages of entering into the agreement, before it is signed. Each party’s lawyer will certify that the advice has been provided. Most commonly, a Binding Child Support Agreement is intended to remain in place until the child / children turns 18 or conclude their secondary education.
The rate of periodic child support (payments made weekly or monthly from one parent to the other) can be the same, more or less, than the administrative assessment. The Agreement might also deal with the payment of third party expenses, such as school fees, private health premiums, out of pocket medical expenses and extra-curricular costs.
A Binding Child Support Agreement cannot be varied. The parties can enter into a new agreement to terminate the Binding Child Support Agreement. It may also be set aside by the Court in certain limited circumstances, including if exceptional circumstances have arisen since the agreement was made such that it would cause the parent/s or the child hardship if the agreement was not set aside.
Limited Child Support Agreement
A Limited Child Support Agreement is a written agreement between parents (or carers) about child support which does not require independent legal advice. Each party must sign the agreement.
A child support assessment must be in place and rate of child support payable under the agreement must be the same or more than the amount assessed. It cannot be less.
A Limited Child Support Agreement can be terminated by either party (without needing the other party’s consent) after 3 years, or earlier if there is a significant change in either party’s income (15% or more) or a significant change in care.
Arrears and enforcement
Child Support must be paid regularly and on time. Arrears of periodic child support (payments to be made each week or month) are a debt due to the Commonwealth. Those arrears are enforceable by Services Australia or by the payee parent.
Services Australia has broad powers of collection and enforcement, including garnishing wages, intercepting the payer’s tax refund, issuing a Departure Prohibition Order (stopping the payer from leaving Australia) and enforcement proceedings in the Court. A payer who owes arrears will also incur late payment penalties.
