Child support is a common topic that comes up with our clients. We often work for mother and fathers where one party has significant wage from the mining industry and there is some dispute regarding how much should be paid or reaching alternative agreements.
There are other options for child support then going through the Child Support Agency. Typically parents will elect to go through the child support agency. This involves a party contacting the agency for a assessment. The assessment is based upon the taxable income of the parties and takes into account the percentage of care of each of the children between the parties. It will also take into account whether a party has a liability to pay child support for children of a previous relationship, or for children of a new relationship, if any. Parties have the right to object to an assessment and to ask for a decision based upon the objection, and if the decision is not accepted then to seek a review from the Social Security Appeals Tribunal.
You can apply to vary an assessment on the following special circumstances:
- there are high costs associated with spending time or communicating with the child;
- there are costs associated with the child’s special needs;
- the child is being cared for, educated or trained in the way both parents intend (ie. the child attends private school);
- the child earns an income, owns property or has access to financial resources;
- the child has already received money, goods or property directly or through the other parent (i.e.. as a result of property settlement);
- there are childcare costs for either of the parents where the child is under the age of 12 years;
- there are necessary expenses which significantly reduce the parent’s capacity to support the child;
- the assessment is unfair due to the earning capacity or financial resources of one or both of the parents;
- the parent’s capacity to support the child is significantly reduced by a duty of that parent to maintain another person or child;
- the parent’s responsibility to support a resident child reduces their capacity to support another child.
Once an assessment has been undertaken, the party receiving the funds can elect to receive privately or have the agency collect direct and pay to you. The risk with private collection is the parent party not paying or paying as they sit fit despite the assessment. The receiving parent can always change to collection by the agency but must be aware of the delay in receiving funds in this way initially- it can take up to three months.
Should both parents be agreeable to not using the Child Support Agency, there are some other options for arranging and paying child support. are:
- Private arrangement
- Limited child support agreement
- Binding child support agreement
A private arrangement is when the parties decide between themselves a reasonable rate of child support and pay it privately. It is always recommended parties have some regard to what the Child Support Agency would collect. You can access the free calculator here https://processing.csa.gov.au/estimator/Parents.aspx.
A private agreement can be formalised using a binding child support agreement or limited child support agreement.
Limited Child Support Agreement
This agreement can only be accepted if a CSA assessment is in place. The rate payable under a limited child support agreement cannot be less than the formula assessment. These agreements can be ended if:
- The amount that would have been paid under a CSA assessment is varied by 15% or more, thereby meaning that the amount paid under the agreement is at least 15% less than the formula assessment;
- It has been 3years or more since making the agreement;
- You make a new limited or binding agreement which terminates the existing agreement, or
- There is a court order.
Binding Child Support Agreement
To be binding, the agreement must include a statement that each party has received independent legal advice before entering into the agreement, and the legal practitioner has signed a certificate. The rate payable under a binding agreement can be less than the CSA assessment. There is no time limit on these agreements.
Binding agreements can be ended if:
- The parties enter into another binding agreement that includes a provision to end the existing agreement; or
- By court order. The court must be satisfied that exceptional circumstances have arisen since the agreement was made causing financial hardship if the agreement isnt terminated. Examples of exceptional circumstances include unemployment and a child to new partner.