Understanding Child Support
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The document details the essentials of child support, including its administration by the Department of Human Services and key eligibility criteria for assessments. It explains how child support amounts are calculated based on parental income, care levels, and agreements, along with the processes for reviews and objections. Additionally, it covers international arrangements for child support and the judicial processes available for disputes.
Understanding Child Support
- 1. UNDERSTANDING CHILD SUPPORT Belinda Jeffrey - Presenter
- 2. PRESENTER BELINDA JEFFREY • 11 years of experience in the area of Family Law • Associate at Michael Lynch Family Lawyers • Separation and Divorce • Property and financial settlement for both married and de facto couples • Parenting arrangements including with whom a child may live or spend time with • Child Support issues • Spouse and Adult Maintenance applications • Personal protection issues including Domestic Violence
- 3. HOW CAN WE BE HELPFUL TO YOU? • Specialist family lawyers • Established for over 20 years • 8 lawyers with over 100 years combined professional experience - majority Accredited Specialists • Private clientele: - confidential and professional advice • Regular articles and publications • Fixed cost initial consultation.
- 4. OVERVIEW 1. The who; 2. What is Child Support?; 3. Assessments; 4. Adjusted Income; 5. Reviews; 6. Objection; 7. Departure; 8. Child Support Agreements; and 9. Case Examples.
- 5. THE WHO • The child support scheme aims to ensure that children receive an appropriate level of financial support from parents who are separated. • The Department of Social Services (DSS) has the responsibility for the administration of the child support legislation and works to develop and improve child support policy to enable more effective delivery of the scheme. • The Department of Human Services (DHS) delivers the scheme and provides services to parents and carers. DHS assists parents to apply for a child support assessment and facilitates the collection and transfer of child support payments. More information can be found on the Human Services website or by calling DHS on 131 272.
- 6. WHAT IS CHILD SUPPORT • Determined through Department of Human Services (Child Support) not the Family Courts. • Previously referred to as the ‘Child Support Agency’ • Upon separation, no child support assessment is automatically made. • A parent must lodge an Application for Child Support.
- 7. ELIGIBLE A parent, or non-parent carer, may apply for a child support assessment for a child only if : • the child is an eligible child; and • is under 18 years of age, and • is not a member of a couple, and • meets the residence requirements for a child support assessment.
- 8. ELIGIBLE An eligible child must: • be born on or after 1 October 1989, or • have parents who lived together and who separated on or after 1 October 1989, or • have a brother or sister who was born to the same parents on or after 1 October 1989, and • not be cared for under a child welfare law of Western Australia or South Australia. NOTE: In some situations, an order may be made pursuant to a child welfare law of Western Australia or South Australia, but that order is not active. That is, the child is actually being cared for by a parent and the parent is not receiving any financial support pursuant to the order. In those circumstances the Registrar may consider that the child is not under the care of a person under a child welfare law for child support purposes, and may regard the child as an eligible child despite the existence of the order.
- 9. HOW MUCH CHILD SUPPORT SHOULD BE PAID DEPENDS ON: the financial circumstances of each parent the age of the child/ren the level of care each parent provides for the child/ren whether either parent supports another child/ren 1 2 3 4
- 10. CHILD SUPPORT WHEN A CHILD TURNS 18 BUT If the child is STILL ATTENDING SECONDARY SCHOOL when they turn 18, until the end of the schooling year. END? WHEN DOES
- 11. CHILD SUPPORT PERIODS Will a new child support agreement always start a new child support period? No. In an existing case, a child support agreement will start a new child support period only if it affects the rate of child support payable. The date that the new child support period starts will depend on the date of the application for acceptance of the agreement, the date the agreement was signed, the terms of the agreement and the date on which child support first became payable under the administrative assessment. If a case starts with a child support agreement, a new child support period starts on the day the application was made to the Registrar for acceptance of the agreement. Does a change of assessment or departure order start a new child support period? No. Nor does a child support period end when the change of assessment decision or departure order ends. Does a child support period end at the end of a child support agreement, change of assessment decision, or departure order? No. The existing assessment continues after the end of a child support agreement, change of assessment decision or departure order. The case will revert to the usual formula assessment for the rest of the child support period. The last relevant year of income will stay the same (the last year of income that ended before the start of the period). The Registrar may be required to make a new assessment if a later tax assessment has issued during the life of the agreement, change of assessment decision or departure. If so, it will make the assessment during the last month that the decision, order or agreement had effect, and it will apply to a child support period that starts on the first day of the following month.
- 12. ASSESSMENT OF CHILD SUPPORT Child support payments are calculated according to an administrative formula that uses an income shares approach and is based on research into the cost of raising children in Australia. • The formula: • uses the combined income of both parents to calculate child support payments; • excludes the same self-support amount from both parents’ incomes, treating them in the same way; • calculates child support payments based on the costs of raising children, according to the incomes of both parents; and • recognises both parents' contributions to the cost of their children through care. • Parents may also choose to negotiate their own child support arrangements through a child support agreement. Agreements can specify the amount, frequency and method of payments but must meet the requirements of the legislation in order to be accepted by DHS.
- 13. LEVELS OF CARE
- 14. Parents combined child support income Cost of 1 child Cost of 2 children Cost of 3 or more children $0 to $36,803 17c for each $1 24c for each $1 27c for each $1 $36,804 to $73,606 $6,257 plus 15c for each $1 over $36,803 $8,833 plus 23c for each $1 over $36,803 $9,937 plus 26c for each $1 over $36,803 $73,607 to $110,409 $11,777 plus 12c for each $1 over $73,606 $17,298 plus 20c for each $1 over $73,606 $19,506 plus 25c for each $1 over $73,606 $110,410 to $147,212 $16,193 plus 10c for each $1 over $110,409 $24,659 plus 18c for each $1 over $110,409 $28,707 plus 24c for each $1 over $110,409 $147,213 to $184,015 $19,873 plus 7c for each $1 over $147,212 $31,284 plus 10c for each $1 over $147,212 $37,540 plus 18c for each $1 over $147,212 Income over $184,015 Costs don’t go up past this cap $22,449 $34,964 $44,165 COSTS OF CHILDREN CHILDREN AGED 12 AND UNDER
- 15. Combined child support income for 1 year Cost of 1 child Cost of 2 children Cost of 3 or more children $0 to $36,803 23c for each $1 29c for each $1 32c for each $1 $36,804 to $73,606 $8,465 plus 22c for each $1 over $36,803 $10,673 plus 28c for each $1 over $36,803 $11,777 plus 31c for each $1 over $36,803 $73,607 to $110,409 $16,562 plus 12c for each $1 over $73,606 $20,978 plus 25c for each $1 over $73,606 $23,186 plus 30c for each $1 over $73,606 $110,410 to $147,212 $20,978 plus 10c for each $1 over $110,409 $30,179 plus 20c for each $1 over $110,409 $34,227 plus 29c for each $1 over $110,409 $147,213 to $184,015 $24,658 plus 9c for each $1 over $147,212 $37,540 plus 13c for each $1 over $147,212 $44,900 plus 20c for each $1 over $147,212 Income over $184,015 Costs don’t go up past this cap $27,970 $42,324 $52,261 COSTS OF CHILDREN CHILDREN AGED 13 OR OLDER
- 16. COSTS OF CHILDREN Combined Child Support income Cost of 2 children Cost of 3 or more children $0 to $36,803 26.5c for each $1 29.5c for each $1 $36,804 to $73,606 $9,753 plus 25.5c for each $1 $10,857 plus 28.5c for each $1 $73,607 to $110,409 $19,138 plus 22.5c for each $1 $21,346 plus 27.5c for each $1 $110,410 to $147,212 $27,419 plus 19c for each $1 $31,467 plus 26.5c for each $1 $110,409 $147,213 to $184,015 $34,412 plus 11.5c for each $1 $147,212 $41,220 plus 19c for each $1 Income over $184,015 Costs don’t go up past this cap $38,644 $48,213 CHILDREN OF MIXED AGES
- 17. ASSESSMENT OF CHILD SUPPORT A useful calculator allows you to calculate how much child support a party will receive or be liable for: http://www.humanservices.gov.au/customer/enablers/online-estimators
- 18. CHANGE OF ASSESSMENT If a parent feels that the formula does not reflect the special circumstances of their case, they may apply to DHS for a change of assessment. Under this process, DHS can examine the broader financial circumstances of both parents and make a decision to depart from the formula assessment.
- 19. NON AGENCY PAYMENTS • Allows for payments made by parent to third party in lieu of child support. • Is one of the following types of payment: - a payment made directly to a payee of an enforceable maintenance liability or to a payee of a carer liability - a payment to a third party in discharge of a debt owed by the payee of the enforceable maintenance liability or carer liability, the payer, or both a non-cash transaction such as a transfer of property or the provision of services taken to be an amount paid under the enforceable maintenance liability or carer liability • Must have less than 14% care (52 nights a year) • Only up to 30% of assessment.
- 20. NON AGENCY PAYMENTS (cont.) EXAMPLES: • child care costs • school fees • school expenses • essential medical and dental items.
- 21. NON AGENCY PAYMENTS (cont.) EXAMPLE: Blythe is liable to pay child support to the Registrar from 1 April 2014, which is the date that Trevor applied for collection. On 13 April 2014, Blythe asks the Registrar to credit $200 paid directly to Trevor on 30 March 2014. Blythe and Trevor intended the payment to be for child support for April. The Registrar cannot credit the payment under section 71 of the CSRC Act. At the time of payment there was no enforceable maintenance liability and the payment was a private payment to the payee. EXAMPLE: Morris was liable to pay child support of $200 per month to the Registrar until Petra opted for private collection on 1 May 2013. The overdue child support amount of $800 remained enforceable. On 2 June 2013 Morris asks the Registrar to credit $600 paid directly to Petra on 1 June 2013. Morris and Petra intended the payment to be for child support for the month of May and for overdue child support. The Registrar can credit $400 of the payment under section 71 of the CSRC Act. At the time of payment, Morris had a liability of $200 for May which was not enforceable. The remainder of the payment can be credited as the overdue amount was an enforceable maintenance liability. The Registrar cannot credit a non-agency payment against a liability that is an agency reimbursement liability. This includes a New Zealand assessment. New Zealand cannot credit non-agency payments against their liability.
- 22. ADJUSTED INCOME FOR CHILD SUPPORT SECTION 43 OF THE ACT INCLUDES: • Taxable income from last relevant year of income • Reportable fringe benefits • Target foreign income • Total net investment loss • Specified tax free pensions or benefits • Reportable superannuation contributions
- 23. MAKING PAYMENT Child support payments can be transferred privately, or DHS can collect and transfer the payments on parents’ behalf. Where payments are not made voluntarily, DHS has a range of powers to enforce the collection of child support. These include: • deducting child support from a parent’s salary or wage; • intercepting tax refunds; • collecting from third parties such as banks; • deducting payments from social security and other government payments; • preventing a person from leaving Australia without paying the debt or making a suitable payment arrangement; • and litigation action to recover a child support debt in any court with family law jurisdiction
- 24. INTERNATIONAL • A person may still be entitled to child support if they or the other parent live in another country. Australia operates under a range of international arrangements for child support and has cooperative arrangements with a number of Commonwealth and European jurisdictions, known as ‘reciprocating jurisdictions’. • DHS can assist parents with their international child support arrangements, depending on their individual circumstances. This may include applying for an Australian child support assessment; registering a maintenance order, assessment or agreement from another country for collection in Australia; or obtaining an Australian court order that requires the other parent to pay child support.
- 25. RECIPROCATING JURISDICTIONS Algeria Fiji Malawi Argentina Finland Malaysia Austria Former Yugoslav Republic Macedonia Malta Barbados France Mexico Belarus Germany Moldova Belgium Greece Monaco Bosnia and Herzegovina Guatemala Montenegro Brazil Haiti Morocco Burkina Faso Holy See, The Nauru Canada, except Yukon and Hong Kong Netherlands Cape Verde Hungary New Zealand Central African Republic India Niger Chile Ireland Norway Colombia Italy Pakistan Croatia Kazakhstan Philippines Cyprus Kenya Poland Czech Republic Kyrgyzstan Portugal Denmark Liberia Romania Ecuador Lithuania Sierra Leone Estonia Luxembourg Singapore Algeria Fiji Slovakia Argentina Finland Slovenia Austria Former Yugoslav Republic Macedonia South Africa Barbados France Spain Belarus Germany Sri Lanka Belgium Greece Suriname Bosnia and Herzegovina Guatemala Sweden Brazil Haiti Switzerland Burkina Faso Ukraine Tanzania, except Canada, except Yukon Quebec United Kingdom, includes Man, Gibraltar, Alderney, Guernsey, Jersey, Sark Trinidad and Tobago Zambia United States of America Tunisia Zimbabwe Uruguay Turkey
- 26. REVIEW/OBJECTION PROCESS • Most child support decisions can be reviewed through the objection process. • If a parent disagrees with a decision made on their case, they can lodge an objection with DHS for an internal review. • If either parent disagrees with the objection decision, they can appeal to the Administrative Appeals Tribunal (AAT) for an independent review of the decision. • Some decisions made by the AAT can be appealed to the AAT for a second review, such as care percentage decisions. • Decisions made by the AAT can only be appealed to a court due to an error of law.
- 27. DEPARTURE APPLICATIONS • In some circumstances, a parent can apply directly to a court if they are dissatisfied with a decision made by the Registrar under the CSA Act or the CSRC Act. It is usually necessary for the Registrar to have dealt with an objection about the decision before the parent can make their court application. • A court dealing with a parent's application under the CSA Act or CSRC Act must have jurisdiction to deal with child support matters under those Acts. • Courts with jurisdiction include the Family Court, the Federal Circuit Court, State and Territory Magistrates Courts and the Family Court of Western Australia. However, as explained in the next SLIDE, the AAT Act sets out the courts that a person may appeal to from a decision of the AAT, and these are the Federal Court of Australia, or the Federal Circuit Court.
- 28. DEPARTURE APPLICATIONS (CONT.) • A parent can appeal to the Federal Court of Australia on a question of law in relation to an AAT first review of an objection decision or an AAT second review of an AAT decision. • Where the AAT first review decision did not involve an AAT presidential member, a person may choose to appeal the first review decision to either the Federal Court of Australia or the Federal Circuit Court . • The AAT can also refer a question of law arising in a proceeding to the Federal Court of Australia. In certain circumstances a parent can also apply directly to a court for a change to their child support assessment because of special circumstances. • The court may make other orders affecting a child support case including orders about child support agreements, stay orders and orders against a payee for the repayment of overpaid child support. • The court may also make some orders under the FL Act that will affect a child support assessment. These include orders relating to care of a child.
- 29. CHILD SUPPORT AGREEMENTS TYPE 1: a Binding Child Support Agreement (BCSA); An alternative to an Administrative Assessment is a private Child Support Agreement. TYPE 2: a Limited Child Support Agreement (LCSA);
- 30. • Both parents must obtain independent legal advice • Support amount can be for more or less than the Administrative Assessment. • May contemplate the payment of a lump sum in lieu of a periodic child support payment BINDING CHILD SUPPORT AGREEMENT
- 31. • Terminate by agreement must enter into new BCSA. • If only one parent seeks to terminate, court application. Limited grounds: - fraud, failure to disclose, or undue influence, amongst other things. • The court will not terminate such an agreement upon the mere whim of a party. BINDING CHILD SUPPORT AGREEMENT(cont.)
- 32. • Independent legal advice not required. • Support amount must be for at least the existing Administrative Assessment. • In Administrative Assessment changes by more than 15 percent, either parent may terminate an LCSA. • Either parent may unilaterally terminate an LCSA if it is 3 or more years old. LIMITED CHILD SUPPORT AGREEMENT
- 33. MY TIPS • Download from the Australian Government publication ‘The Parent’s Guide to Child Support’; • Use the estimator calculator on the DHS website to inform; • If amicable with the other parent discuss options about assessment, the amount and collection BUT do not just rely on a hand shake; • Should DHS be involved try to limit this to just assessment; • Lodge taxation returns on time, update as your financial circumstance when they change; • Keep good records: • Interaction with DHS; • Time child/ren spend with you; • Additional costs paid by you; and • Payments made by you to the other parent. • Avoid ‘arrears’ accruing; and • Get legal advice and assistance early on is any issues arise.
- 34. CASE EXAMPLES
- 35. GET IN TOUCH Fixed Fee – First Consultation | $385 (incl. GST) for Solicitor or Associate | $440 (incl. GST) for Accredited specialist Address: 9 / 193 North Quay, Brisbane Phone: (07) 3221 4300 | Email: law@mlynch.com.au | Website: www.michaellynchfamilylawyers.com.au The material contained in this presentation does not constitute specific legal advice
- 36. THANK YOU! YOUR FEEDBACK IS GREATLY APPRECIATED
Editor's Notes
- #2: Let’s get started. Firstly, thank you for logging in and taking time out of your schedule to listen to me speak on the topic of Understanding Child Support. The webinar will run for approximately 50 mins.
- #3: A little about myself … I have been practising in the area of Family Law for 11 years and I am Associate here at Michael Lynch Family Lawyers.
- #4: We are a boutique law firm specialising in Family Law. Our firm has existed now for some 20 years and we have 8 solicitors available to advise client. We offer a fixed fee initial consultation to new clients which I will touch on again at the end of this webinar as well as regularly producing articles and publications for our clients and the public at large.
- #8: (CSA Act section 24(1))
- #9: (CSA Act section 24(1))