How can I arrange child support matters?

An important aspect of separation is ensuring that the interests and wellbeing of any child of that relationship are met.

Child support functions to give protection and support to children in this circumstance, by way of one parent giving an ongoing payment to the other for the financial benefit of the child.

Here, the law considers the capacity of each individual parent to do so.

For example, if you are a parent who works full time and doesn’t see your child much, you will likely be required to pay child support. Alternatively, if you care for your child full time, you will likely be entitled to receive child support.

Who is required to pay child support?

Any parent, whether biological or adoptive, has an enforceable responsibility to pay child support if required.

Who can receive child support?

Any parent or guardian who cares for the child 35% of the time or longer over a year can receive child support.

How are child support payments made?

Child support payments can be made in 3 main ways:

1. Periodic payments

This involves child support being paid directly to the receiving parent on a routine schedule and can be modified according to change of circumstance.

2. Non-periodic payments

This involves child support payments made indirectly to third parties for things such as school fees and extra-curricular activities.

3. Lump-sum payments

The lump-sum payment by one of the parents’ must be the amount that the receiving parent is entitled to as per a Services Australia assessment (or more), unless you enter into an agreement. See below for more information on how this is assessed. 

Child support options available to you:

Parents have 3 main options when arranging child support:

1. Child Support Agreement

2. Child Support Assessment by Services Australia

3. Informal agreement

In certain circumstances, you may be able to apply for Court ordered child support.

Child Support Agreement

If you and the other parent of your children can agree on the amount and method of payment from one parent to the other, you may enter into a Child Support Agreement. Both parents must sign this. You can then register the agreement with Services Australia and the Court.

There are 2 types of agreements:

1. A binding agreement

2. A limited agreement

Binding agreement:

A binding agreement allows you and your former spouse to reach an agreement without the involvement of Services Australia. The agreement requires specification of whether periodic, non-periodic or lump-sum payments will be given. It is required that both parents receive independent legal advice prior to entering this type of agreement.

A binding agreement is the most permanent child support arrangement and can only be modified or ended via a secondary agreement to terminate the first one, or an Application to the Family Court of Australia. If you would like advice surrounding this type of agreement, get in touch with us via the contact form.

Limited agreement:

A limited agreement offers more flexibility than a binding agreement as they only last 3 years and can then be renegotiated by each parent. However, to enter into this type of agreement, Services Australia must first determine the minimum amount of child support that is to be paid.

Child Support Assessment

If you and your former spouse cannot come to an agreement regarding child support, you may receive a Child Support Assessment. This is the most common arrangement, and involves Services Australia assessing how much each parent will pay or receive. These payments are determined via a formula that considers different factors.

The formula can be simplified into 8 main steps:

1. Find each parents’ child support income

2. Find both parents’ combined income

3. Calculate each parents’ income percentage by dividing both individual incomes by the combined income

4. Find the percentage of care of each parent

5. Find each parents’ cost percentage

6. Find each parents’ child support percentage by subtracting the cost percentage from the income percentage to determine if a parent pays or receives child support

7. Find the expected cost of the children based on the parents’ combined income, amount of children, and their ages

8. Determine child support amount needed to be paid/received

Once this assessment is complete, the amount one parent may need to pay is enforceable against them. Child support is collected and distributed by Services Australia.

If you do not agree with the outcome of the assessment, you can lodge a Change of Assessment Form. If you would like assistance with filling this out, get in touch with us via the contact form.

What are care arrangements?

Care arrangements refer to the amount of time the child spends in each parents’ care, and makes up a portion of the Child Support Assessment. In other words, the parent who spends less time looking after the child will pay the other parent child support.

Care arrangements generally convert a parent’s number of nights per fortnight of care for the child into a percentage that puts them in one of five levels of care identified by Services Australia.

Care arrangements make up a large portion of the Child Support assessment, and so you should inform Services Australia of any changes to this within a month of the changes occurring as this may increase or decrease the child support payments. Generally, the payments are reviewed at the end of each financial year at tax return time.

Child Support payments generally end once the child is 18, however it may be earlier in certain situations, such as if the child becomes able to financially support themselves or marries.

Informal Agreement

If the two parents agree and do not wish to pursue a Child Support Assessment, the parties can form an informal arrangement based on mutual trust and good faith. This is not legally enforceable.   

Managing child support online

Creating a Child Support online account is an easy way to manage your child support payments as both the Services Australia website and the Express Plus Child Support mobile app allow you to send and receive required documents and instantaneously update/check your details.