The relevant legislation is the Child Support (Assessment) Act 1989. It’s rather like the Tax Act – complex, confusing and convoluted. Whether you are the payer or the receiver of child support, or simply have an interest about how child support in Australia works, this guide is for you. Child support simplified!
THE BUZZ WORDS
- Periodic child support – an amount paid to the receiver of child support on a recurring basis (e.g. $200 per week per child).
- Non-periodic child support – a lump sum amount that is either paid directly to the receiver of child support or is paid towards a child’s education, extra-curricular activities or private health insurance (e.g. private school fees and levies).
- Private collect – when you have an assessment for child support in place, but you and the other parent agree that the payments will be made and collected as between you (e.g. the payer deposits a periodic child support amount of $200 per week into the receiver’s nominated bank account).
WHAT ARE MY OPTIONS?
There is no “one size fits all” approach.
1. The “DIY” Approach
As the name suggests, the “DIY” approach is simply that – you do it yourself.
As with children’s arrangements whereby parents can reach agreements independently of lawyers and the Court about how much time the child or children will spend with each parent, the same applies to child support.
Best suited to: Parents who have an amicable relationship and are effective communicators.
Pitfalls: Possible for one party to cease making the payments and/or be irregular with payments.
2. The “Assessment” Approach
The quickest and simplest way to ascertain a ballpark figure of what you should be paying or receiving is by launching the child support estimator
If you are happy with the amount calculated by the online estimator, you can then make a formal Application for an Assessment. Once the Assessment is made, you and the other parent can then decide whether you will pay/receive the monies privately, or whether child support will collect the monies directly from the payer on your behalf.
Either parent can make an Application for an Assessment and can do so at any time. So be warned, even if you and the other parent have agreed between yourselves as to an appropriate amount of child support (i.e. the “DIY” Approach), the other parent can still make an Application for an Assessment.
Best suited to: Parents who are unable to agree on an amount of child support.
Pitfalls: Can be subject to fluctuations due to changes in one or both parents’ incomes.
3. The “Documented” Approach
Limited Child Support Agreement
A Limited Child Support Agreement covers the payment of both periodic and non-periodic payments and remains in place for a period of 3 years. The parties are not required to obtain independent legal advice before signing.
Best suited to: Parents with young children who wish to create certainty in child support payments.
Pitfalls: Needs to be re-drafted every 3 years.
Binding Child Support Agreement
A Binding Child Support Agreement can also cover the payment of both periodic and non-periodic payments, however remains in place until the child or children attain 18 years of age or the parties agree to enter into a new Binding Child Support Agreement. The parties are required to obtain independent legal advice as to the advantages and disadvantages of entering into the Agreement before signing.
Best suited to: Parents who wish to create certainty in child support payments until the child or children reach 18 years of age.
Pitfalls: Difficult to terminate or set aside.
4. The “Special Circumstances” Approach
It is possible to make an application to the Family Court in circumstances where an assessment of child support is not appropriate. This is called a “Departure Order”.
Best suited to: A child/ren with special needs, a parent with a significant income, where both parents have agreed to send their child/ren to a private school
Pitfalls: Involves making an application to the Family Court of Australia – Court proceedings can be lengthy and stressful.
If you wish to discuss any of the approaches listed above in further detail, we invite you to contact one of our accredited family law specialists by calling (03) 9670 5711.For more information on child support, we recommend reading the Government’s online Child Support Guide.