The act of separation itself can create heightened emotional states between separating parties, but to add the issue of Child Support can further exacerbate a difficult situation.
Child Support is sometimes one of the most difficult matters to deal with when parties have decided to separate.
We hope the information below will help you attain a better understanding of Child Support and the responsibilities that may affect those involved.
What is Child Support?
Child Support is the payment from one parent to another for the expenses associated with the child after the relationship has ended. Child Support payments are usually made on a periodic basis but can also be made in a single or series of lump sum payments.
Why Pay Child Support?
Just because a relationship has ended does not mean your obligation to the child of the relationship has ended. In most cases, a parent has an obligation to maintain their child until the child turns 18 years of age.
As the name suggests, the payment is for the benefit and support of the child. One of the policy reasons behind Child Support is to minimise the disruption to the child’s lifestyle when a relationship has broken down.
Do I have to make application for Child Support?
It is often the case that receipt of child support, or asking the Child Support Agency to commence an assessment to collect child support will affect the amount you receive in relation to Family Tax Benefit A.
In many circumstances, a parent living in Australia with a child from a previous relationship may be required to take reasonable steps to obtain child support from the child’s other parent to be eligible for more than the base rate of Family Tax Benefit Part A.
This is the case even if the other parent lives outside Australia.
If I am not seeing the Child do I still have to pay Child Support?
Most probably, although it will depending on your circumstances, and in particular the income of each party.
What if I don’t agree with the Child Support Assessment?
It is possible to lodge an objection to an Assessment and seek an alternative decision from the Child Support Agency.
If you are unsure whether you should object or not, and how, then don’t hesitate to contact our professional team for advice.
What happens if I don’t pay and I live in Australia?
How the Child Support Agency treats a person who is liable to pay Child Support but refuses to pay depends on where the liable parent lives.
Generally, if the liable parent lives in Australia and does not make the required Child Support payments on time and in the amount due, the Child Support Agency may use their extensive powers to:
- Deduct the Child Support payments from the liable parent’s pay prior to the funds being deposited into their nominated account;
- Deduct outstanding Child Support payments from the liable parent’s tax refund prior to the funds being deposited into their nominated account;
- Prevent a liable parent from leaving Australia until they pay the outstanding Child Support liability or agree to an acceptable payment arrangement;
- Commence court action against the liable parent to obtain the outstanding Child Support;
- Deduct payments from a liable parent’s government income support payments; and/or
- Apply late payment penalties to the liable parent with any penalty sums paid to the Australian Government.
What happens if the liable parent lives overseas?
If you are seeking payment from a parent that lives overseas, it is possible to apply for an Australian Child Support Assessment and then register the order, assessment or agreement for collection in a reciprocating jurisdiction.
In some cases, the Child Support Agency can be successful in having your Child Support Assessment recognised in a reciprocal jurisdiction. This means that a liability can be registered and enforced in that jurisdiction under their own laws and procedures.
The collection arrangements for child support vary from country to country, and unfortunately, the Australian Child Support Agency have no control over how (or if) Child Support can be collected overseas.
There is a substantial list of reciprocating jurisdictions, some of which include Canada, France, Germany, Hong Kong, India, Italy, Malaysia, Singapore, South Africa, Spain, Sweden, United Kingdom, U.S.A.
Australia also has a specific arrangement for collection of Child Support in New Zealand.
Further details can be obtained from the Child Support Agency Website, or from one of our professional team.
When do Child Support Payments Cease?
A liable parent does not have to pay Child Support in the following limited circumstances:
a) Once a child turns 18 years of age; however, a caring parent may make an application to the Child Support Agency for Adult Child Support; and/or
b) If the child dies, marries or enters into a de facto relationship, or is adopted.
How much do I have to pay?
The amount of Child Support a liable parent has to pay depends on many factors including, but not limited to, the number of evenings you have the care of the child and your taxable income.
The Department of Human Services has a useful website containing a Child Support Estimator that may assist you in estimating the amount of Child Support you are required to pay in specific circumstances: https://processing.csa.gov.au/estimator
Alternatively, you may telephone the Child Support Agency between the hours of 8.30am to 4.45pm (AEST) Monday to Friday on 131 272, or seek assistance from our professional team.
Ways to Pay Child Support
There are three principal ways that financial support for children is managed in Australia:
- Private Agreement: The parents can reach a private agreement for the payment of Child Support that is not registered with the Child Support Agency.
- Child Support Assessment: The parents can make an application to the Child Support Agency to assess the amount of Child Support a parent must pay and choose to either register the agreement with the Child Support Agency or not to register the agreement and make payments privately.
- Child Support Agreement: The parents can enter into a Child Support Agreement in one of two forms:
A Limited Child Support Agreement must provide for the caring parent to receive the minimum payment they would otherwise receive under a Child Support Agency Assessment. Other payment arrangements can be included as part of the Child Support payment sum, such as payment of school fees, medical insurance and extracurricular activities. A Limited Agreement can be terminated after a three-year period by either parent.
A Binding Child Support Agreement allows you to make an agreement about the amount of your child support payments and how they are paid. It can be made for any amount that is agreed, and can also include details of how payment will be made for both cash or non-cash items, such as school fees or health insurance.
All parties to a Binding Agreement must obtain independent legal advice before making or ending a binding agreement. The Child Support Agency will not agree to register a Binding Agreement unless there is a signed Certificate of Independent Legal Advice from each party’s legal advisor.
Binding Child Support Agreements can only be terminated upon the occurrence of a “terminating event” such as the child turning 18 years of age, or agreement by the parties. In very limited circumstances it is possible to seek an order from the Court to set an Agreement aside, although proceedings of this nature are often lengthy and costly.
Child Support is a complex area that involves consideration of your legal and financial circumstances.
It is also important to realise that the Child Support Agency has extensive powers, including the ability to access governmental records and payments from the Australian Tax Office and Centrelink.
Don’t hesitate to contact us for assistance if you are unsure about your entitlements, or the necessity to pay child support.