A Parent’s Obligation to Pay Child Maintenance for Adult Children

Sometimes, parents are required by Court orders to pay child maintenance to children who have become adults even though they may have already completed their secondary education and have a degree of independence. The obligation to pay for adult children pursuant to the Family Law Act (1975) (“the Act”) is worded as an exception to the rule. Section 66L(1) reads:

“A court must not make a child maintenance order in relation to a child who is 18 or over unless the court is satisfied that the provision of the maintenance is necessary…”:

With regard to children under 18 years, a parent’s obligation to support them financially is covered by a separate piece of legislation.* .

For a Court to make an order that a parent pay child maintenance for an adult child, it must be satisfied that the provision of the maintenance is necessary:

“(a) to enable the child to complete his or her education; or

(b) because of a mental or physical disability of the child”.

The court must also be saistisfied that the parent expected to pay has the financial capacity to do so. In every case, there will normally be a tension between the merit of the case on behalf of the child and the appropriate extent of the obligation of a parent to have to continue to support an adult child financially.

Necessary to “complete education”

In determining what was necessary the Court in the case of Everett v Everett (2014) 52FAM LR No 1 found that “the central focus of the enquiry” is whether the maintenance is necessary to enable the child to complete his or her education; and that “necessary” does not mean “absolutely essential” but rather that the maintenance is needed by the child and that it is “reasonable” to require the parent to contribute, having regard to the parties’ financial circumstances and other relevant factors.

The child’s likelihood of success in completing the course may be considered. Evidence may also be required as to what course the child is undertaking and as to what their results are. The Court will generally consider the child’s ability to support themselves, the child’s income and earning capacity, (if any).

“Mental or physical disability”

In regard to the second limb the Court in Re AM (Adult Child Maintenance) (2006) 198FLR 221 held that liability does not depend on the disability having arisen at a particular time such as during childhood or on the child being “dependent”. In Re AM the Court found that the term “necessary” in Section 66L(1) means something more than morally or socially “desirable” but less than “absolutely necessary”.

The court also found that the word “disability” in section 66L(1)(B) refers more to consequence than causes. For example, a disabled person lacks mental power or a physical faculty or both and is restricted in the way he or she lives[1].

In the case of Re AM the applicant child made a claim against one parent for adult maintenance. The child in that case suffered from physical disability manifesting in chronic joint pain, muscle wasting, restricted movement, osteoporosis, synovitis, generalised weakness and the inability to walk unaided for any distance. The applicant could not manage herself and required ongoing personal care and attention.

In that case, the Court ordered that both the birth mother and birth father pay adult child maintenance to the child and divided the amount payable in an equitable manner between the parties. The court capped this at five (5) years.

In the case of Everett v Everett referred to above, the child in question suffered from Cystic Fibrosis which had been diagnosed as an infant. She was also diagnosed with diabetes which related to the Cystic Fibrosis and had an unrelated obsessive compulsive disorder.

In the matter of Adams and Simpson [2008] FMCAfam 1327 (19 December 2008) the child suffered Aspergers Syndrome and was diagnosed with Postural Hypotension. In this case, the Judge found that on the balance of probabilities His Honour was not convinced that the adult child was totally unsuited for any kind of employment and that the provision of maintenance would be necessary because of his disability. In that case the application was dismissed.

For more information or to make an appointment to see one of our family law solicitors in either our Canberra or Queanbeyan office, contact Carlos Turini – Accredited Family Law Specialist

e: cturini@elringtons.com.au | p: +61 2 6206 1300

*The Child Support (Assessment) Act 1989 creates an obligation for parents to pay maintenance for their children. A different term is used in that piece of legislation, namely, “child support” rather than “maintenance”: see articles in this website listed at http://elringtons.com.au/category/articles/family-law/childsupport/ Pursuant to the Child Support (Assessment) Act 1989, the obligation to pay child support ends when the child turns 18. Normally children are in Year 12 in high school when they turn 18 years and the legislation provides that, in that event, the child support obligation ends when the school year ends.

[1] [at paragraphs 73 to 74]

Family Law Child Support – The formula

By Carlos Turini – Family Law SpecialistCarlos Turini

The Costs of Children Table is available from the Dept. of Human Services.

The basic formula applies to parents with one child support assessment and no other dependent children. The formula below is used for most child support assessments.

The steps of the basic formula are:

  • to calculate each parents child support income, which is a parent’s adjusted taxable income minus a self-support amount.
  • the parents child support incomes are combined together.
  • the combined child support income is divided by each individual parents child support income to get the parents income percentage
  • each parents cost and care percentage are calculated using the Human Services Care and Cost Table
  • the cost percentage is subtracted from the income percentage for each parent. The result is called the child support percentage.
  • If it is a negative percentage, that parent is assessed to receive child support because their share of the costs of raising the children is more than met by the amount of care they are providing.
  • If it is a positive percentage, that parent is assessed to pay child support because they are not meeting their entire share of the costs of the child directly through care.  (Different care arrangements for different children may result in different percentages)
  • The costs for each child are based  on the parents’ combined child support income using the costs for children table available on the Dept for Human Services website.
  • The final child support payable is calculated by multiplying the postive child support percentage by the costs of the child, this figure is the child support amount the paying parent needs to transfer to the other parent.

Non-parent carers

If you provide care for a child and you are not the parent, you may be able to receive Child Support from both of the child’s parents if you apply for a Child Support assessment.

Same-sex parents

If you are a separated parent with children from a previous same-sex relationship and already have a Child Support case where you are listed as a non-parent carer, you can ask that your case be changed to reflect your status as a parent.

Estimating your income for child support payments

In some circumstances, if your income changes significantly, you can choose to have your child support assessment based on an estimate of your income for example:

  • if you have experienced the loss of a job or contract
  • have had a significant reduction in hours of work or overtime
  • or have recently started receiving Centrelink benefits.

You may not be able to lodge an estimate if your child support assessment is based on one of the following:

  • a child support agreement
  • a determination made under the change of assessment process, or
  • a court order

If you wish to lodge an estimate of your income, you must follow the current process  as outlined on the Child Support Agency website www.csa.gov.au.

Each family is unique and child support can vary according to your situation.

For more information or to make an appointment to see one of our family law solicitors in either our Canberra or Queanbeyan office, contact Carlos Turini – Accredited Family Law Specialist

p: (02) 6206 1300 | e: cturini@elringtons.com.au

Family Law – Private Binding Child Support Agreements

By Carlos Turini – Family Law Specialist

On occasions, the parents of a child prefer to come to an agreement regarding child support which is outside the formula which exists under the Child Support (Assessment) Act 1989 (“the Act”). Both parents may prefer to work ‘outside the square’ as it suits them both to have an arrangement which is outside the formula. The agreement may be formalised legally and lodged with the child Support Agency (“the Agency”) under Part 6 and 7 of the Act. The agreement would then be binding upon the parties.

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.

Formalities

For a child support agreement to be binding under the Act it must comply with a number of requirements. Each party must obtain independent legal advice and each solicitor must complete and sign a certificate of legal advice which must be attached to the agreement.

Private school fees, medical and dental expenses as part of child support agreement

Both the party who has an obligation to pay child support (“the payer”) and the party entitled to receive child support (“the payee”) may be happy to enter into a private child support agreement outside the formula.

Lump sum child support and transfer of real property in lieu of child support

Sometimes, parties have a long term commitment that their child will attend or continue to attend a private school. The school fees may be substantial, often greater than the periodic payments which would be required under the formula. The parties may agree, and formalize the agreement legally, to provide that both parties will share the school fees and the obligation of the parent to make periodic payments be reduced or cancel altogether.

The parties may have a commitment that the child will receive the best medical and dental care and they enter into a private agreement to make provision for such expenses to be shared and for the periodic payments required to be reduced or cancelled.

Private child support agreements provide a large degree of flexibility to parties negotiating a settlement to separate their assets. A party entitled to receive child support may instead retain an asset including an investment, shares or real property in lieu of future child support for a number of years.

As an example, the payee may be a parent only working part time and having the primary care of the children. Both parents may wish for the children to continue to live in the former matrimonial home rather than the primary carer and children having to move to accommodation of an inferior quality. However, the payee would be unable to pay the other party a sum of money representing his/her share to the title to the property. The parties may agree that child support payments for the children for the next five years would be equivalent to the value of the payer’s share to the property. A private child support agreement could provide that the payer will transfer title to the house to the payee in lieu of child support payments for five years.

Approval by Agency

Importantly, such an agreement would need to be approved by the Registrar of the Child Support Agency. The Registrar may refuse registration if the agreement is considered to be less beneficial to the payee than if he/she continued to receive periodic payments pursuant to an assessment.

The parties may choose not to ledge a private agreement for registration. However, the payee must take care to ensure that a private child support agreement will not affect his/her Centrelink entitlements if not approved.

For more information please contact:

Carlos Turini at: cturini@elringtons.com.au or call Carlos on: 02 6206 1300

Further Reading:

Child Support

Challenging Child Support Assessments

Family Law – Challenging Child Support Assessments

By Carlos Turini – Family Law Specialist

In the vast majority of cases, child support is paid by a parent of a child (“the payer”) to the other parent (“the payee”) pursuant to an assessment issued by the Child Support Agency (“the Agency”) pursuant to the formula in the Child Support (Assessment )Act 1989 (“the Act”) (see our article entitled “Child Support”).

However, 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.

Objections addressed by CSA in-house

A parent (or a non parent carer) may lodge an objection with the Agency to reconsider an assessment which has been issued. An officer from the Agency will review the original decision by considering submissions lodged by both parents.

The Agency officer may change the original assessment if the case falls within the category of one or more specific “reasons” listed in the Act, namely:

  • If the payer incurs high costs to enable him/her to spend time with the child;
  • high costs associated with the child’s special needs
  • High costs of caring for, educating or training the child in the way both parents intended
  • The original assessment is unfair because of the child’s income, earning capacity, property or financial resources
  • The original assessment is unfair because the payer has paid or transferred money, goods or property to the child, the payee, or a third party for the benefit of the child
  • the high child care costs for the child (and the child is under 12 years of age)
  • The parent’s necessary expenses significantly affect their capacity to support the child
  • The original assessment is unfair because of the income, earning capacity, property or financial resources of one or both parents.
  • The parent’s capacity to support the child is significantly affected by:
    • their legal duty to maintain another child or person,
    • their necessary expenses in supporting another child or person they have a legal duty to maintain
    • their high costs of enabling them to spend time with, or communicate with, another child or person they have a legal duty to maintain.
    • The parent’s responsibility to maintain a resident child significantly reduces their capacity to support the child support child.

External review applications to the SSAT or AAT

A parent may challenge the in-house review decision by appealing to the Social Security Appeals Tribunal (SSAT).

The SSAT provides an informal and economical procedure to review decisions made by the Agency.

The SSAT will consider all submissions by the parties and will take a fresh look at the original decision made by the Agency.

Appeals to the Courts

A parent affected by a decision from the SSAT may appeal to the Family Court or the Federal Magistrates Court applying family law jurisdiction.

A parent may in some cases also appeal directly to a Court in relation to a decision made by the Agency.

For more information please contact:

Carlos Turini at: cturini@elringtons.com.au or call Carlos on: 02 6206 1300

Further Reading:

Child Support

Private Binding Child Support Agreements

Family Law – Child Support

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

Further Reading:

Challenging a Child Support Assessment

Private Binding Child Support Agreements