What Is Child Support?
Under the Child Support (Assessment) Act, child support is financial support paid for a child by a parent to the other parent or carer of the child. Carer can include grandparents, other relatives or friends who have the child in their care.
The Department of Human Services (DHS), formerly the Child Support Agency, is a government agency that looks after child support payments. It administers the child support arrangements and assesses the amount of support which should be provided.
For more information, please refer to the Department of Human Services’ ‘Child Support’.
Who Must Pay Child Support?
Parents are responsible for financially providing for their children, even if they have never lived together. The liability to pay child support arises when there is an ‘administrative assessment’ from the Department of Human Services (DHS), or the parties have entered into a ‘child support agreement’ registered with the Department of Human Services (DHS).
The decision is based on each parent’s income, the number of children and their living arrangements.
Even if a parent does not spend any time with his/her child, they will still be responsible for making child support payments.
Various Types Of Child Support Payments
There are three different categories of child support payments:
- Periodic payment – amount to be paid at a weekly, monthly, annual or other periodic interval.
- Non-periodic payments – Where the court or agreement makes an order for non-periodic payments (eg payment of school fees to third parties), it must state whether or not these will reduce the annual rate of child support payable.
- Lump sum provision – a payment made to the other parent as a “credit balance” to be used to meet ongoing liabilities.
There are also non-agency payments, which arise when the Registrar credits the value of non-cash payments or the provision of services to a payee or to a third party against a child support liability that is registered for collection.
The Department of Human Services (DHS) does not have power to enforce child support payments against third parties.
The Child Support Assessment Formula
The Department of Human Services (DHS), uses a formula to work out how much child support should be paid. Under the Child Support (Assessment) Act 1989, the Registrar must use the following eight steps:
- Step 1. Work out each parent’s child support income
- Step 2. Work out the parents’ combined child support income
- Step 3. Work out each parent’s income percentage
- Step 4. Work out each parent’s percentage of care for the child
- Step 5. Work out each parent’s cost percentage for the child
- Step 6. Work out each parent’s child support percentage for the child
- Step 7. Work out the costs of the child
- Step 8. If a parent has a positive child support percentage under step 6, the annual rate of child support payable by the parent for the child for the day is worked out using the formula:
(Parent’s child support percentage) x (Costs of the child)
If you would like a general estimation of how much child support is likely to be payable in your situation, please refer to the ‘Child Support Online Estimator’ on the Department of Human Services (DHS) website.
What Is A Child Support Agreement?
Parents may decide to make an agreement about the amount and form of child support to be paid as an alternative of an assessment made by the Department of Human Services (DHS).
There are two types of agreements: binding agreements and limited agreements:
A- Binding child support agreement:
- Must be in writing and signed by both parties
- Both parties must obtain independent legal advice before signing and their lawyers must attach a statement confirming that they have provided legal advice about the agreement
- No child support assessment is needed by the Department of Human Services (DHS) before entering into a binding agreement
- Parties can arrange the payment of child support privately or ask the Department of Human Services (DHS) to collect child support.
- Binding agreements can make provision for lump sum payments of child support
- Binding agreements cannot be varied
- Binding agreements can be ended only by agreement of both parties. If one party wishes the end the agreement, they must apply to the Family Court
B- Limited child support agreement:
- Must be in writing and signed by both parties
- Do not require legal advice (but legal advice is strongly encouraged)
- A child support assessment by Department of Human Services (DHS) must be completed before entering into a limited agreement (notional assessment)
- The limited agreement must provide for child support that is equal, or more than, the amount in the notional assessment
- Child support can either be paid privately between the parties or the Department of Human Services (DHS) can collect the money
- Either party to the agreement can ask the Child Support Registrar to end the agreement after three years
- Parties may also agree to end the limited child support assessment earlier or one party may apply to Family Court to end the agreement.
- The Court may find that a limited agreement is not legal if it was made using threats or pressure.
Please refer to the Department of Human Services’ ‘Child support agreement’ section.
In Case Of A Disagreement With The DHS Child Support Assessment
The parties involved can ask the Department of Human Services (DHS), to review the amount of child support. It may be possible to have the assessment altered if the circumstances of the parties have changed since it was made or the parties believe that it does not reflect their current situations (change in employment, change in time spent with child etc.).
For any change of assessment the parties must apply to the Department of Human Services (DHS). The Department of Human Services (DHS) will then send a letter to the parties letting them know of any changes made to their child support assessment. Parties have 28 days after the original decision to lodge an objection to lodge an objection, outlining the grounds relied upon.
The Department of Human Services (DHS) will then contact the parties to let them know what decision has been made about the objection. If the objection to the DHS assessment was not successful, parties can appeal the decision to the Social Security Appeals Tribunal (SSAT).
If you feel that the assessment of child support payable by the Child Support Agency has resulted in an inequitable outcome for you, our experienced and empathetic family lawyers will advise you thoroughly on all your legal options. In addition, our lawyers and barristers have a wealth of experience in the Family Court and Federal Magistrates Court and will vigorously represent you and your children’s interests if it is necessary to commence legal proceedings.
Appeal At The Social Security Appeals Tribunal (SSAT)
Once parties notify the Department of Human Services (DHS) of their intention to appeal the review of the Department of Human Services (DHS) decision, the Department of Human Services (DHS) will provide the SSAT and the parties involved with a detailed written explanation of its decision. The SSAT will then inform the parties of an appointment time for a Hearing.
The Registrar is required to consider the objection and any response within 60 days after the objection is lodged.
Once the review has been determined, the Social Security Appeals Tribunal (SSAT) will provide the decision to either disallow the objection or allow it in whole or in part and the reasons for the decision.
Parties can appeal the Social Security Appeals Tribunal (SSAT) decision but only on a question of law. Appeals as to the refusal to grant a time extension and ‘care decisions’ can be made to the Administrative Appeals Tribunal(AAT).
Enforcement Of Child Support Payments
Alternatively parties can arrange for the Department of Human Services (DHS) to collect and enforce payments of child support payments whether payments are to be made under an administrative assessment or a child support agreement.
At GMH Legal Lawyers we encourage our clients to organize the collection of child support payments through the Department of Human Services (DHS) if one of the following scenarios arises:
- The payer does not have a good payment history
- The payer is not likely to pay
- There has been family violence
- The payer has not lodged tax returns on time or usually lodges it very late
- The other parent’s income use in the assessment may not be correct
If parties have a private collection arrangement and the latter breaks down, parties can ask the Department of Human Services (DHS) to start collecting the liability. Parties must be informed that the Department of Human Services (DHS) can only backdate collection three months.
The Department of Human Services (DHS) can take action to enforce collection of child support by:
- Taking money out of any tax refund directly from the Australian Tax Office, before the payer gets any of the refund due
- Taking money out of a payer’s bank account which is in his/her sole name
- Taking debt recovery action against the payer in Court
- Issuing a departure prohibition order that prevents the payer from leaving Australia
- Deducting money out of social security pensions and other benefits of the payer
The payee can also make an application to a Court to enforce collection of outstanding payments while the case is still registered for collection with the Department of Human Services (DHS).
Please refer to the Department of Human Services’ ‘Collection and enforcement methods for child support’ section.
Request For Change To Child Support Assessment
Once an administrative assessment of child support has taken place, either parent may make a “Change of Assessment” Application to make a departure from the administrative assessment because of special circumstances.
It is important to note that departure decisions cannot reduce the assessment below the minimum rate and cannot change the assessment for a period more than 18 months before the applications was made.
The Registrar can only change an assessment if one or more of the 10 listed reasons below is established in the ‘special circumstances of the case’:
- The costs of maintaining a child are significantly affected by high costs of enabling a parent to spend time with or communicate with the child
- The costs of maintaining a child are significantly affected by high costs associated with the child’s special needs
- The costs of maintaining a child are significantly affected by high costs of caring for, educating or training the child in the way both intended
- The child support assessment is unfair because of the child’s income, earning capacity property or financial resources
- The child support 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 costs of maintaining a child are significantly affect by the high child care costs for the child and the child is under the age of 12
- The parent’s necessary expenses significantly affect their capacity to support the child
- The child support 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 duty to maintain another child or person
- Their necessary expenses in supporting another child or person they have a duty to maintain
- Their high costs of enabling them to spend time with or communicate with another child or person they have a duty to maintain.
- The parent’s responsibility to maintain a resident child significantly reduces their capacity to support the child.
Please refer to the Department of Human Services’ ‘Changes of circumstances that affect your child support’ section.
Available Alternatives To Change Child Support Assessment
Parents can also seek to change the child support assessment on the following basis:
- Formalization of a written agreement with the other parent incorporating the change;
- Making a Court application;
- Objecting to the level of care;
- Non-agency payments;
- Change to a parent’s income;
- Occurrence of a ‘terminating event’
Child Support And The Family Court
The Department of Human Services deals with most child support matters, however the Family Court has jurisdiction over the issues listed below:
- Paternity matters
- Either party can apply to a court to resolve disputes involving paternity of children and entitlement to child support
- Child support agreements
- Application can be made to set aside a child support agreement
- Application to change assessment that is over 18 months old
- Arrears of child supports
- Court can make orders to enforce the arrears, to suspend the arrears or to discharge them.
- Certain circumstances when the payer is overseas
- Maintenance orders for:
- Adult children who are studying or have a mental/physical disability
- Children who are living independently and applying for maintenance in their own rights
- Step children maintenance
Child Support Legislative Framework
The assessment and collection of child support is primarily the responsibility of the Department of Human Services (DHS).
The main legislative provisions for child support are:
- Child Support (Assessment) Act 1989 – deals with the assessment of child support and jurisdictional issues.
- Child Support (Registration and Collection) Act 1988– deals with collection and enforcement of child support.
Overseas Child Support Payments
There are many cases where one parent is living in Australia and the other parent is living overseas. Australia has many reciprocal child support arrangements with overseas countries. These are referred to as reciprocating jurisdictions.
The Department of Human Services often has a role in collecting and enforcing payments in these matters. The receiving parent applies to the child support agency of the country where they live and that authority sends a request to the Australian Department of Human Services (DHS).
Some countries will only accept child support arrangements outlined in Court orders but many countries such as New Zealand, England and the US will accept assessments of child support made by the Department of Human Services (DHS) in Australia.
GMH Legal Solicitors are experienced in dealing with international child support arrangements. Do not hesitate to contact us if you wish to know more about the list of reciprocating and non-reciprocating jurisdictions and the enforceability of your child support payments.
For more information, please refer to the Department of Human Services’ ‘Child support while living outside Australia’ section.
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