Child Support Matters
Child Support: Assessments, Payments and Agreements
Child support relates to a parent’s responsibility to maintain their child. In Australia, the Child Support (Assessment) Act 1989 guides child support matters, whilst the Department of Human Services’ Child Support Agency (CSA) evaluates claims and collects child support payments.
Child Support Assessments
In most cases, the party who the child resides with is the one who makes the application to the Child Support Agency. The Agency then carries out an assessment of both parties and decides on a suitable payment. A formula is used to calculate the required child support payments. A number of factors are considered, such as: the gross income of both parents for the year; how old the child is; the types and amount of expenses it will take to care for the child; if there are other child care obligations; and, the time the child spends with each party.
Post-assessment, one parent will pay the CSA. This is then paid to the other parent each month.
To calculate a speculative child support payment figure – whether you are the payer or receiver – visit the estimator at the Child Support Agency’s website (www.csa.gov.au).
Altering Child Support Assessment Outcomes
At anytime, a parent may need to alter the child support assessment outcome. That is, they will need to make an application to “depart” from the assessment, claiming “special circumstances”. In these cases, the formula used can be modified or departed from. One scenario is that there are significant costs involved for one parent to travel to see the child. A modified formula will acknowledge these costs. In the situation where one parent owns extensive assets that are not included as income, resulting in a low income figure, the formula will be modified to make sure child support is fairly shared amongst the parents.
Non-CSA Child Support Agreements
In the majority of cases, parties do not need to go through the Child Support Agency to reach an agreement. That is, the Child Support Agreement can be worked out between each parent by themselves. Once decided upon, an Agreement can be registered with the CSA. This formalises the Agreement, providing powers to the CSA to collect any outstanding money owed. Alternatively, parents will not register with the CSA and prefer to abide by the agreement amongst themselves.
It’s important to note that any Child Support Agreement made after a CSA assessment will be replaced by that later agreement.
Periodic Review of Child Support Agreements
Child Support Agreements are re-examined on a regular basis. This is either performed at the end of the tax year or it is voluntarily included in the actual Agreement. In terms of the reviewing of Child Support Agreements, two types pertain: Limited and Binding (as of 1 July 2008).
Limited Child Support Agreements. As the name suggests, these are for a limited time only. In existence for three years, they must have had an assessment performed. Following the three year period, if the parents want to, they are able to consult with each other and enter into a new Agreement.
Binding Child Support Agreements. When these types of Child Support Agreements are entered into, parties choose to work out the agreements outside of the Child Support Act guidelines. In order for this agreement to be legally binding, parties must have legal representation. It is also important that their lawyers certify they gave their clients advice before being party to the Agreement (e.g. benefits and drawbacks).
The difference is that binding agreements can only be terminated by putting another agreement in place or by being made unethically (such as by deception, force or lack of disclosure).
Child Maintenance: Over 19 years of age
Although child maintenance is most commonly associated with minors, there are exceptions to this. In certain situations, a child over the age of 19 years can receive child support payments. Either a parent or the child themselves can submit the application. Some instances where adult child maintenance is paid include the need to finish schooling or due to a disability.