Child Support

Child support is financial support for a child paid from one parent or carer to another. Parents are legally obliged to maintain their children until they reach the age of 18 years, and in some cases even after a child turns 18.

The amount of child support that one party is legally obliged to pay is generally determined by an administrative assessment by the federal Department of Human Services – Child Support (colloquially called “the Child Support Agency”).

Parties can also enter into private agreements about the amount of child support payable by one or both parents, that go above the administrative assessment amount. These are called Child Support Agreements (see more below).

The administrative assessment process can be complex, but the Child Support Agency information pages and contact numbers can help you understand your obligations or entitlements. The Child Support Agency even has a calculator to help give you a rough idea of whether you will be obligated to pay money or entitled to receive money.

Administrative assessments do not cover children over the age of 18 years, claims for financial support from step-parents and some international child support cases. These are determined through the Courts.

Applications for administrative assessments

The obligation to pay child support starts when the Child Support Agency accepts an application for an administrative assessment (which can also be backdated in some cases).

A parent or eligible carer of a child can make an application for child support.

The application includes how much you earn, your partner’s income and how much time the child spends with each of you. The Child Support Agency will then apply formula considering:

• incomes of both parents;
• an amount for self-support
• the number of nights the child spends with each parent;
• the age of the child; and
• the average cost of living for children of that age.

The Child Support Agency will issue the administrative assessment setting out who must pay what to the other.

The Child Support Agency can then collect and distribute the payment on behalf of a party, or the parties can reach an agreement that the payment be made directly to a party.

Varying administrative assessments

There are two ways to change an administrative assessment:

1. Changing an element to the formula – for example, where a party’s income goes up or down, or a change to the care arrangements for the child. The Child Support Agency will then determine the new child support rate under the formula.
2. Departing from an administrative assessment – a party can apply to the Child Support Agency to change the assessment under certain special circumstances and if the new rate is “just and equitable” and “otherwise proper”. There are very specific circumstances where the Agency will look at and consider this option, so it is best to get legal advice about whether you have grounds to apply for a departure or defend a departure application.

Child Support Agreements (private agreements)

Parties do not have to have an administrative assessment if they agree on the financial support arrangements amongst themselves.

Since the administrative assessment covers what is called “periodic” child support or “cash payments”, parties may well agree to change that periodic amount and/or also include payment of “non-periodic” expenses.

Periodic payments are an amount that is to be paid weekly/fortnightly/monthly or other periodic intervals. Non-periodic expenses include items like school and extracurricular fees, education related expenses, medical fees not covered by Medicare or private health insurance, or private health insurance fees.

It is usually best to have a private agreement formalised into a Child Support Agreement to provide certainty for the parties and enforceability in the future.

There are two types of Child Support Agreements:

1. Limited Child Support Agreements; and
2. Binding Child Support Agreements.

Limited Child Support Agreements

Limited Child Support Agreements are usually best suited for flexible arrangements in the future and have the following features:

• Must be in writing and signed by both parties. There is no requirement to have independent legal advice before signing, however we strongly advise that you do to ensure you understand the agreement and the effect of it;
• Must have an administrative assessment in place and the agreed amount cannot be less than the administrative assessment;
• Last for three (3) years and thereafter either party can terminate the Agreement; and
• Can only be ended:
  • by a Court when certain grounds are met; or
  • by the parties agreeing to end the Agreement and entering into a Termination Agreement or new Child Support Agreement; or
  • if the administrative assessment changes by 15% in situations not contemplated in the Agreement; or
  • if one of the parties stops being an eligible carer for a certain period of time.

Binding Child Support Agreements

Binding Child Support Agreements are different from Limited Child Support Agreements in the following ways:

• Don’t need an administrative assessment in place so the parties can agree on any amount payable for child support;
• Can include a lump sum payment;
• Unless there is an earlier termination event agreed between the parties in the Agreement, are usually intended to last until a child turns 18 or if the child turns 18 during their last year of secondary school, the last day of school that year;
• Require both parties to have independent lawyers that give them advice about the effect of the Agreement and the advantages and disadvantages of the Agreement;
• Can be ended in the same way as Limited Child Support Agreements (but does not include the 15% variation situation).

Binding Child Support Agreements are usually best suited where the parties agree on the final arrangements for child support.

Adult Child Maintenance (after a child turns 18 years of age)

In certain cases, a party can apply to the Courts to receive financial support for a child over the age of 18 years. These usually include cases where the child is completing tertiary education, has a serious illness or physical or mental disability.

How we can help

Smith Family Law can guide you through the processes associated with child support applications, advise you as to your legal entitlements or obligations and the best way to reach an agreement and formalise any agreement.