How long do you have to support your child?
The parents of a child have a duty to support their children financially while the children are under the age of 18 years pursuant to the Child Support Assessment Act (1989). In some cases if the child has a disablity or is still completing their education the Federal Circuit Court or Magistrates’ Court can make an order pursuant to a different piece of legislation, the Family Law Act (1975) for maintenance to continue (adult child maintenance).
The Child Support Assessment Act (1989) (“the Act”) includes a formula which estimates the child support payable by one parent to the other (or to a carer who is not the biological parent) in each case based on a number of factors including each of the parents’ income, the age of the children and the level of care of the children which each parent has.
The Child Support Agency (“the Agency”) may issue an assessment of child support payable in each case based on the formula. An application for an assessment may be lodged with the Agency through a Centrelink office or online.
Challenging the formula
The formula is not suitable to all cases. An assessment pursuant to the formula will be based, among other things, on the taxable income of the parents. There are cases where the taxable income of one or both of the parents does not reflect his/her true financial circumstances as a parent may not be on a salary, be asset rich but income poor and/or self-employed and able to claim substantial tax deductions on their income.
On such occasions, the parent with an obligation to pay child support (“the payer”) or the parent entitled to receive child support (“the payee”) may be entitled to lodge an objection to the assessment and an officer from within the Agency may then review the decision in-house. The result may be an adjustment to the assessment in the particular case to reflect the true financial capacity of the parents.
If unsatisfied with the in-house review decision, the applicant may then appeal externally to the Agency to the Social Security Appeals Tribunal, in some more complex cases, for a departure order to a Court.
For more information see: Challenging a Child Support Assessment
Private agreements outside the formula
The parents of a child may agree to enter into a private agreement The Act allows parties to enter into such private child support agreements which may be registered with the Agency even though the agreements go outside the formula.
A private child support agreement may be appropriate, for example in one of the following cases:
- If the child attends a private school and the parents agree to share on the school fees;
- If the child is likely to require expensive orthodontic work;
- If, as part of a family law property settlement, one parent pays a lump sum amount of child support or transfer’s a property in lieu of child support.
For more information see: Private Binding Child Support Agreements
Informal agreements based on the formula
On occasions, parties agree between themselves on the child support to be paid by one parent to the other based on the formula without formally applying for an assessment to issue. The Agency’s website includes an “estimator” which calculates the sum payable based on the specific circumstances of the case: see Family Assistance / Child Support – Projected Estimate
Conclusion
The arrangements which parties make regarding the care of their children will affect the amount of child support payable under the formula and it is important that parents receive appropriate legal advice about the child support consequences of care arrangement enter into.
For more information please contact Carlos Turini
e: cturini@elringtons.com.au | p: 02 6206 1300
