Child support ensures that when parents get divorced or separated, both parties will financially contribute towards raising the children like how they would if they weren’t separated.
Even if a parent doesn’t live with his/her children anymore, they still need to meet their financial responsibilities. This also means that if the children are in your care, you will receive money from the other party to help raise them.
Child Support in Australia
The entire Australian Government’s Child Support scheme is governed by Services Australia. This agency optimises the whole process; they can assess, transfer, and collect payments on your behalf. You can also choose to make your own arrangements and handle your own payments or transactions. Payments should be made regularly and paid on time.
The goal is to give children an appropriate level of financial aid at an amount the parents can afford. In normal circumstances, the higher-earning parent pays more or receives less support.
If you act as the present legal guardian– a grandparent or a kinship carer, for example, you are also qualified to apply for a child support assessment, especially if you care for the child 35% of the time. Check out support for non-parent carers to verify and learn more about your eligibility for child support and Family Tax Benefit.
Costs of the Children and Income Shares: How Much Child Support to Pay/ Receive?
The exact amount depends on various factors like the income of the parents, how many children there are, how old the children are, and how much time the children spend with each parent.
There are cases wherein a partner does not agree with the assessment done by Services Australia. In that case, you can always request for account reassessment. The DHS adopts a very complex formula for calculating child support payments, and there’s definitely no one-size-fits-all solution since every family situation is different and there are always special circumstances to consider.
Access Child Support Assessment Page—Services Australia online and get the details about how exactly it’s calculated, what the base rate is, and so on.
Non-agency payments
A “NAP” or non-agency payment is any amount paid by a child support payer to the payee or a third party. The payee and the payer should agree and ideally put in writing that the given amount is a form of child support.
For instance, Mary (the payee) will receive $2000 every month from the payer John. Mary approaches John about their child’s camp fees and needs $500 for the said expense. Mary should agree that the $500 will be credited against the $2000 child support liability. John will then report the payment to the child support agency with a written agreement signed by Mary and proof of payment. The child support liability payable is now at $1500.
There are some cases, though, wherein a payee does not agree that the payment made is in lieu of child support. Even if the payee does not agree, it will still be qualified if the payments made are within the category of Prescribed Non-agency Payments stated in regulation 5D of Child Support (Registration and Collection) Regulations 1988.
The following are some of the prescribed NAP categories:
- Fees charged by a school or preschool
- Expenses for books and uniforms prescribed by a school or preschool
- Fees for dental or medical services for the child
- The payee’s security bond for his/her home or share of amounts payable for rent
- The payee’s share of amounts for utilities or body corporate charges for his/her home
- The payee’s share of repayments on loans to finance his/her home
- Costs of running or obtaining a motor vehicle, such as standing costs and repairs.
If payments are not made
What happens if the payer does not pay or fails to pay on time? There could be penalties applied to the outstanding amount. The penalty amount will be paid to the Australian government, not to the payee.
If the payer no longer pays for child support due to medical emergencies, job loss, or financial difficulty, it’s best to ask for legal advice or reach out to legal advocacy groups offering free legal advice. Instead of idling and not doing something about the responsibility, it’s best to inform the Child Support agency sooner about your inability to continue the payments, so they can walk you through the process and possibly give you resources and advice as to the best course of action.
Child support is usually a major concern for people who go through divorce or separation. It’s a complicated area of law, and every family situation is unique.
The matter is simpler if both parties can easily come up with an amicable agreement. A Child Support Agreement without the involvement of the Department of Human Services is usually less stressful, but those who are in dispute usually cannot go this route. If the other party refuses to pay child support or denies the costs, a child support assessment through DHS is the only way forward. If you’re experiencing difficulties in reaching a resolution, you can also ask for a lawyer’s advice as that can become a court matter.
When to get Services Australia to collect Payments
The payee can apply for Child Support Collect. You can use this service if:
- You and your ex-partner are not on good terms and find it hard to talk about child support.
- You want the agency to collect the payments and make sure that the payments are in full and on time.
- You need help recovering overdue payments.
- The payer does not lodge tax returns regularly.
When you use Child Support Collect, you’ll receive the money via bank transfer, or for international payees, Services Australia can also send cheques.
Private Arrangements
Parents or non-parent carers can also agree to make private arrangements and process the payments directly to each other.
Just make sure to create a binding Child Support Agreement. For this to be recognised, get legal advice and acquire a legal certificate or material attached to the agreement. Legal advice is necessary to make a child support arrangement binding and valid.
Frequently Asked Questions about Child Support Payment
These are the common child support questions among Australian parents.
- How does child support work in Australia?
The level of child support depends on the parents’ income, the number of children, the age of the children, and the care arrangements. There are a lot of factors that can affect the estimation. Whether or not the parents are married to each other, child support arrangements should be made in the case of separated parents. Services Australia will be the one to decide how much child support one will pay or receive.
- How much income percentage do you have to pay for child support?
It depends on the situation, the care arrangement, and the parents’ income, among many other factors. You can refer to the child support formula on the DHS page useful for everyone who wants to know how exactly the computation works.
- What is the maximum child support in Australia?
Although the child support amount varies, there’s a maximum amount one can pay based on the combined income of both parties; that is up to 2.5 times the yearly equivalent of the Male Total Average Weekly Earnings and the Costs of Children Table. A detailed overview can be found in the Australian Government Child Support Guide.
- At what age do you stop paying child support in Australia?
Child support payments end when the child turns 18 years old. However, if the child is still in high school, one can submit an application to extend the support until the end of the school year.
- How do I avoid overpaying for child support?
There are things you can actively do to ensure that you’re only paying the fair, correct amount. The following are some tips to keep in mind:
- See your children more- Child support payments are usually lower if you spend at least 2 nights with your children every fortnight. The amount will drop if you spend 5 nights and the amount just keeps on decreasing as the number of nights increases as well. In order to have more time with the kids, you should have a mutual agreement with your former partner.
- Create a binding Child Support Agreement- This helps keep you protected and helps you keep any extra income you’re able to make.
- Hire a good tax accountant- It’s always better if you’re able to minimize your taxable income as you prepare for tax returns. It lessens child support costs and tax liabilities as well since the child support payment is based on taxable income.
- Pay only for what you’d receive credit for- Sometimes, child support payers think that the rules don’t really favour them, and that could actually be true. So when paying for anything out of pocket or sending money to your child or the other parent, securing a written acknowledgment can help, so it can be counted as child support. This may make you appear stingy, but little things like this are always the practical choice.
- Inform Child Support if your income decreases– Since the amount of support is based on your taxable income, you should inform them as soon as your income drops, so a downward adjustment can be made.
- Donate to charity- Donating to registered charitable organisations is tax deductible. One of these charities is VACCA which supports aboriginal and Torres strait islander nations. You can then lessen your taxable income and also partly reduce the amount.
- Quarantine increased income after separation- You can apply to have the extra income you earned after separation to be excluded from the assessment. You can apply within the first 3 years after separation. The additional income you earned may be from working overtime, a second job, a new, higher-paying job, or a business.
- How do I contact a child support Australia?
You can call Child Support General Enquiries on 131 272 should you have any questions or concerns.
Child support arrangements can be complex and stressful for some families and their children, but there are always ways to go about it with calm, peace, and integrity. Always be aware, gracefully move on from your past, aim for amicable agreements, and get legal advice when necessary.