Advice

Child Support Scheme

The scheme was introduced in two stages. The first stage commenced on 1 June 1988. After that date the Child Support Agency collected maintenance which was ordered to be paid by the Court upon the registration of the Court Orders with the Child Support Agency.

Stage two started on 1 October 1989. Child Support was then to be determined according to an administrative formula.

Significant legislative amendments came into effect on 1 July 1999 which included important changes to the administrative assessment formula.

Eligibility

Children under 18 and either:

  1. Parents who separated after 1 October 1989; or
  2. Children born after 1 October 1989.

Child support now extends to the end of the school year in which a child reaches 18 years of age if they are a full-time secondary student.

Major/substantial contact and shared care for children

In 1993 changes were introduced to deal with children who are basically shared and where parents had the children staying with them overnight for substantial periods.

Shared care

This occurs where a child is cared for at least 40% of the days or nights by the parent who has the child for the least amount of time. Alterations have been made to the exempted income amount when parents share the care of a child. Both parents are allowed exempted income amounts as if the shared care child resided with both parents as a relevant dependant. Previously only one parent was allowed the exempted income amount. Both parents become responsible to each other for child support and entitlements are worked out in a different way. Each parent claims a normal exempt income based on Social Security Pension rates and the parent who owes the highest amount pays the difference when the other parent’s liability is subtracted.

Substantial contact

This occurs where a child is cared for by the parent (who has the child for the least amount of time) for at least 30% of the days or nights and in this situation the other parent has major contact. Although the calculation is based on nights, if a non-residence parent has the child in their care less than 10% of the nights, but does care for the child at other times of the day, the residence parent may consent to increasing the number of nights the non-residence parent has contact under the formula to reflect this.

Getting around the formula

  1. Parties can sign a Child Support Agreement which can make different arrangements than that provided in the formula. If the payee is receiving a pension their ability to enter into a Child Support Agreement is restricted.
  2. If there are special circumstances which make you feel the formula has produced an unfair result the formula can be amended. This is particularly so where:
    1. a parent cannot provide proper support for a child because of commitments to other children or people. This only applies where there is a legal duty to support the other people or children and does not apply in general terms to step children;
    2. the cost of maintaining the child is affected by the high cost of contact, special needs of the child or costs of education;
    3. the assessment is unfair because of the financial circumstances of the parent of the child or because of the payment or the transfer of property previously made. This is particularly the case where there has been a significant change in income since the relevant tax return was lodged; and
    4. it is possible to provide child support other than in the form of a regular cash payment. It is possible to pay up to 25% of the child support liability for things such as the other parent’s electricity, gas and mortgage payments.