Financial Support for Children born after October 1989
Section 3 of the Child Support (Assessment) Act 1989 clearly states that parents have a primary duty to maintain their children. Child Support is payable until the child turns 18 years or completes year 12. For the vast majority of children, the Child Support (Assessment) Act applies.
There are three ways that financial support for children can be arranged after parents separate:
- Child Support Under the Child Support Assessment Act
A child support assessment is based on a formula, and collected through the Child Support Agency (CSA). CSA website is found at www.csa.gov.au. The child support assessment sets out the minimum that the parent is to pay. Parents can pay more if they choose to. The formula takes into account the income of each parent, the number of children, the living expenses of the parents and the living arrangements of the children.
- Child Support By Agreement Between The Parents
If parents can agree on an amount other than that assessed by the CSA formula they may, in certain circumstances enter into a private Child Support Agreement registered with the CSA. The parents can then choose to collect child support privately or to ask the CSA to collect the payments. A Child Support Agreement can also provide for child support to be paid in ways other than by cash payments to the carer; for example, the payment of private school fees, sporting activities or health fund contributions etc.
- What happens if the parent ceases paying child support
If this happens the CSA will pursue the outstanding payments. If necessary, payments will be deducted from the paying parent's wages by the employer before those wages are paid.
Review of child support liability
The formula assessment can be reviewed by the Child Support Review Office in limited circumstances including:-
- where the capacity of either parent to support children is significantly reduced because of their duty to maintain another person or child including themselves;
- where the capacity of either parent to support children is significantly reduced because of high cost of exercising contact;
- the special needs of the relevant child including cost of caring for or educating the child in a way in which the parents had intended before separating;
- the assessment is unjust and inequitable because of the payer's income, earning capacity, property or financial resources;
- the assessment is unjust or inequitable because of a prior payment or transfer of property made to the payee parent for the child's benefit.
- high child care costs (exceeding 5% of carer's income) for child under 12 years.
Applications for review under these grounds are made to the Child Support Review Office. If either party is dissatisfied with the decision of the Child Support Review Office, an Application can be filed in Court seeking a judicial determination.
Child Maintenance and the Family Law Act
Child maintenance is calculated under the Family Law Act in the following circumstances only when:
- the parents separated before October 1989 and all children of the relationship were born before that date;
- the liable parent is not resident in Australia;
- a child or a third party with an interest in the child's welfare (but not the formal care and control) seeks child support.
In the above circumstances, and presuming you cannot reach agreement with the other party, child maintenance will be determined by a Court. There are three basic steps to determining the amount of child maintenance:-
- determine the financial needs of the child;
- determine the extent to which the child has financial resources to meet those needs; and
- compare the financial ability of each party/parent to meet the needs of the child. In doing this, the Court will look at the financial resources and income of each party and will assess the reasonable needs of each party.