Child Support: What do I need to know?

In Australia, both parents have a duty to financially support and properly maintain their children until the age of 18. Child support is the payment from one parent or carer to the other parent or carer for the benefit of the child.

Following separation or divorce, parents may choose to have child support payments assessed by the Child Support Agency or enter a private agreement of their own.

How does child support work?

In Australia, child support is managed by the Commonwealth Government agency known as Services Australia (which includes what is colloquially called the Child Support Agency).

The Child Support Agency uses a unique formula to work out how much each parent should be contributing towards the costs of raising their child. To work out the amount of child support that should be paid, the Child Support Agency will look at a variety of factors including:

• Each parent’s income and their combined income;
• The number of children;
• The age of each child; and
• How much time each parent cares for the children.

The Child Support Agency will then issue an administrative assessment setting out who pays the other and how much. This is called periodic child support and is a weekly/fortnight/monthly annual sum of money.

It is important to note that parents are only legally obliged to pay the amount assessed by the Child Support Agency and any further amount.

The amount of child support to be paid is therefore unique to each parent’s circumstances and will typically cease when a child turns 18, or in some cases when the child finishes high school in the year they turn 18.

You can collect or pay child support in two different ways:

1. Child Support Collection:

The Child Support Agency will collect the money from the paying parent, for example by taking payments out of their pay, and will then transfer it to the receiving parent. This is a good option for parents who find it hard to talk with each other about child support or if you need help to make sure payments are made on time and in full.

2. Private Collection:

The parties themselves organise the transfer of the child support payable amongst themselves rather than getting the Child Support Agency to collect and distribute on their behalf. This is a good option for those who want more flexibly about how to pay, where there is an amicable co-parenting relationship and where you can rely on payments being made on time and in full. It is important to keep records of all payments made as Services Australia can collect payments if the paying parent falls behind for up to 3 months in normal circumstances.

Eligibility for a child support assessment

To be eligible for a child support assessment you must meet residency rules and be either the legal parent or non-parent carer of the child.

The Child Support Agency must be satisfied that both parents in the application are the legal parents of a child, for example, if you are named on a child’s birth certificate as a parent or named in adoptions papers as a parent.

If you care for a child and you are not their parent, you may be able to receive child support from one or both parents. This occurs in circumstances where you care for the child for at least 128 nights a year and you are not the partner of either parent of the child. The parents of the child must have agreed that you are to care for the child unless it is unreasonable for them to care for the child, for example, due to a serious risk to the child from violence or abuse.

How do I apply for child support with the Child Support Agency?

The easiest way to apply for child support is online through the Services Australia website.  After you apply for a child support assessment, the Child Support Agency will assess your application and let you know the outcome including how much child support you will be entitled to/have to pay.

If you want to estimate what your child support payments may be prior to making an assessment, Service Australia has an online calculator that can help you to estimate the child support payable based on your circumstances. The online calculator can be accessed at the following link: https://processing.csa.gov.au/estimator/About.aspx.

What if I don’t agree with the assessed amount?

If you disagree with an assessment made by the Child Support Agency, you have 28 days from the relevant child support notice to lodge an objection. There are many reasons a parent may object to an assessment including if the Child Support Agency has missed important details or has used wrong or old information for example, using an incorrect calculation of income or an incorrect percentage of care of the children.

Services Australia will then decide about your objection and if you still don’t agree with the objection review, you can ask the Administrative Appeals Tribunal to review it. Specific legal advice is recommended.

It is also important to inform the Child Support Agency as soon as possible if your circumstances change including if the care arrangements for the children are altered, as this can affect the child support payments you receive or make.

Can my former partner and I reach an agreement about child support?

Depending on your circumstances, it is possible that child support payments as assessed by the Child Support Agency will not cover all of the expenses associated with raising your children.

You and the other parent may therefore decide to privately agree on an amount of child support to be paid and how and when to pay it and not involve the Child Support Agency in its calculation. It is important to be aware that the Child Support Agency cannot collect any overdue periodic child support amounts from the paying parent in private agreement and that such an agreement is not binding.

Alternatively, parents may wish to enter into a private agreement enforceable by way of a contract to provide certainty and greater flexibility for the amount of child support payable. These types of agreements are called Child Support Agreements. A Child Support Agreement can include one or all of the following payments:

• Periodic child support payments, for example, weekly payments;
• Non-periodic child support payments, for example, school fees, extra-curricular activities or health insurance;
• Lump sum payments; and/or
• A modification of the child support formula.

Types of Child Support Agreements

There are two types of private contracts namely, a Limited Child Support Agreement or a Binding Child Support Agreement.

A Limited Child Support Agreement is a written agreement that can be in place for a period of up to 3 years. Importantly, this means that it can terminated by either party without notice to the other party after the 3 years are up.

Before entering into a Limited Child Support Agreement, the parties must have a current child support assessment in place. The payments set out in the limited agreement must be equal to, or more than the amount that has been assessed by the Child Support Agreement and can include the obligation to pay non-periodic amounts as described above. Parties are not required to obtain independent legal advice before entering into a such an agreement, but they may choose to do so and it is recommended.

Unlike a Limited Child Support Agreement, there is no time restriction on a Binding Child Support Agreement. A binding agreement is much harder to terminate and is intended to provide certainty and finality on the issue of child support by remaining in force until the child or children turn 18 years of age.

The periodic child support amounts in a Binding Child Support Agreement can be more or less than the amount that would be payable under a child support assessment by the Child Support Agency and can include the obligation to pay periodic amounts as described above. It will continue to be binding despite a change in circumstance for example change in income, loss of employment, bankruptcy, or change in income-earning capacity. Given the onerous nature of Binding Child Support Agreements, each party is required to seek independent legal advice before entering into such an agreement.

Contact Us

Our Family & Relationship Law Team at Coulter Legal are experienced in providing advice on child support matters including Child Support Agreements. Please contact our office on (03) 5273 5273 to arrange an initial consultation, free of charge, to discuss your personal circumstances and how we may assist you.