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Are you paying too much Child Support, or too little?

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If you think you are paying too much child support, or too little, the first thing you'll need to understand is how Child support assessments are conducted and how you can apply for a review.

In Australia, a parent’s duty to maintain their children occurs through child support payments.

To determine whether a parent is required to pay child support, the Department of Human Services (commonly referred to as the Child Support Agency ) undertakes an assessment.

The assessment process can be very confusing. This article will help you figure out what the Department will assess when considering how much child support is to be paid by you or the other parent.

Child Support Formulas

The Department uses a number of formulas to figure out the amount of child support you need to pay each day.

The chart below will help you to determine which formula applies to you.

child support chart

* For example, the other parent is not a resident of Australia.

Carers

If you are a carer, you may also be able to claim child support. A different set of formulas (formulas 2, 4, 5 and/or 6) will apply. Please contact our office for further information.

Example 1

If example 1 applies to you, the Department will use formula 1 to assess the child support payable.

Formula 1 is used to create a method statement and ultimately, the child support payable by each parent. Your method statement will outline the following for you and the other parent:

1.        

Child support income:

Parent’s adjusted taxable income less the parent’s self-support amount[1]

A negative result is considered $0.

2.        

Combined child support income:

Add together your and the other parent’s

child support income

3.        

Income percentage:

This is worked out using the figures from items 1 and 2 above.

Parent’s child support income ÷ parent’s combined child support income

4.        

Percentage of care:

The Department will work out your care percentage based on the amount of care you provide.

This steps is easiest if you and the other parent are able to agree how much care you each provide. Eg you care for the child 100 nights a year and the other parent cares for the child the remaining nights per year.

NOTE: this is based on nights, not days.

If you can’t agree, the Department will ask for evidence from both parties and will work the percentage out for you.

5.        

Cost percentage:

This is worked out using the percentage of care figure from item 4.

For example, if your percentage of care is less than 14%, your cost percentage will be nil. If your percentage of care is more than 86%, your cost percentage will be 100%.

6.        

Child support percentage:

Parent’s income percentage less the parent’s cost percentage

7.        

Costs of the child:

The costs of the child are based on the parents' combined total income using the costs of children table published by the Department each year. [https://www.humanservices.gov.au/individuals/services/child-support/child-support-assessment/how-we-work-out-your-assessment/basic-formula#costsofchildren]

Note: All of these figures are for the child for a single day.

If, based on the above, you have a positive child support percentage the annual rate of child support payable is worked out using the formula:

Parent’s child support percentage for the child for the day

X

Costs of the child for the day


To work out what figure this will result in for you, please use the online calculator which can be found at the link below:

https://processing.csa.gov.au/estimator/About.aspx

 


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Example 2

If example 2 applies to you, the Department will use formula 3 to assess the child support payable.

Formula 3 is used to create a method statement, determine the costs of the child, work out your multi-case cap[2] and ultimately, the child support payable by each parent.

The Department will follow the process below:

  1. Complete your method statement which will include the following:

a)        

Child support income:

Parent’s adjusted taxable income less:

(i)                  Parent’s self-support amount

(ii)                Parent’s relevant dependent child amount and

(iii)               Parent’s multi-case allowance

A negative result is considered $0.

b)       

Combined child support income:

See example 1

c)        

Income percentage:

See example 1

d)       

Percentage of care:

See example 1

e)       

Cost percentage:

See example 1

f)         

Child support percentage:

See example 1

g)        

Costs of the child:

See example 1

  1. If you have a positive child support percentage, the following rate is determined:

Parent’s child support percentage for the child for the day

X

Costs of the child for the day

  1. Work out each parent's multi-case cap.
  2. If you or the other parent have a positive child support percentage, the annual rate of child support payable by the parent :
    1. the rate worked out at point 3 above OR
    2. the parent's multi-case cap (whichever is lower).

Again, all of these figures are for the child for a single day.

To work out what figure this will result in for you, please use the online calculator which can be found at the link below:

https://processing.csa.gov.au/estimator/About.aspx

Day Care and Complications in Determining your Percentage of Child Support

Child Support AssessmentsTo determine your percentage of care for your child, the Department will consider how many nights in a year you care for your child.

Many care arrangements, particularly for young children, provide for day contact only. It may be the case that you care for the child 5 days a week from 9am until 5pm. So how is this considered?

We recently had to consider this when assisting a client with his parenting matter. The client had a young child (pre-school age) who spent the day with his father (8am to 5pm) three times per week. Although this amounts to a substantial period of time with his father, on a strict interpretation of the legislation, his care percentage would be zero.

The Department declared that the client’s percentage of care for the child was 14% despite not having any overnight time with the child.

This demonstrates that, despite the legislation, the Department will consider the time you spend with the child (if this time is significant), even where this time is not overnight time. This will be assessed on a case by case basis.

What does this mean for you? Should your circumstances mean that you are unable to spend overnight time with your child but you still spend significant time with the child, and the Department assesses your percentage of care of the child as nominal, you should seek a reassessment on that basis. We have an article on how to do this and can provide you with assistance throughout the process.

 

[1] Self-support amount means 1/3 x annualized MTAWE figure for the relevant June quarter

[2] Multi-case cap is (100% - parent’s cost percentage) x multi-case child costs. The multi-case cap is used to ensure that the paying parent does not pay more child support for a child than they would if all the children lived in the same household. (Child Support Guide, Version 4.4.2, 12 August 2019, Australian Government).

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