Child support - what is it?
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What is child support?
Child support is a payment made by one parent to the other to help with the cost of looking after children - or - the payment may be made by one or both parents to a person who has care of their children.
The Child Support Agency is a (Commonwealth) government agency that looks after child support payments.
A parent may pay child support because there is an 'administrative assessment' in place or because there is a 'child support agreement' registered with the Child Support Agency.
What is an administrative assessment?
Also known as formula assessment.
The Child Support Agency uses a mathematical formula to work out how much child support should be paid. The child support assessment takes into account factors such as the number of children involved, the ages of the children, the income of both parents and the level of care each parent provides for the children. The end result is a child support assessment.
What is a child support agreement?
You and the other parent are also able to enter agreements known as child support agreements, which set out in writing the amount, frequency and method of payment of child support payments. Child support agreements should not be entered lightly. They are legally enforceable financial agreements that in some cases can only be changed by future agreement between you and the other parent or by making a complicated application to the Federal Magistrates Court or local state court. It is sensible for you to get independent legal advice before entering a child support agreement.
What is notional assessment?
This is the amount of child support that would have been payable using the child support formula if the agreement was not in place.
There are two types of child support agreements:
- Binding child support agreement:
- you and the other parent must have legal advice before entering a binding agreement
- the advice from the lawyer will include advice on the advantages and disadvantages of entering into the agreement
- the lawyer for each party must sign a certificate to say that legal advice has been given
- the certificates of the lawyers must be attached to the agreement
To end a binding agreement:
You and the other parent may agree to end it but if you cannot agree then only a court can end it.
- Limited child support agreement:
- there must be an administrative assessment in place
- the amount of child support to be paid under the agreement must be equal to or greater than the assessment
To end a limited agreement it can be ended by agreement of the parents or at the choice of either parent after three years or before three years has elapsed by either parent if a notional assessment varies the amount payable by more than 15%.
Centrelink and child support
The Child Support Agency does not have to ask for Centrelink approval before accepting child support agreements.
From 1 July 2008, the Child Support Agency will issue notional assessments. The notional assessment will be updated every three years. If you have a limited agreement registered with the Child Support Agency you can ask for a notional assessment at any time.
Your family tax benefits will be calculated on the notional assessment amount, not the amount that is fixed by an agreement (whether binding or limited). Notional assessments will also be used to calculate your entitlements if the agreement is for payment of a lump sum.
Exception: if your agreement was registered before 1 July 2008 then your benefits will be calculated on the amount in the agreement not on a notional assessment.
How does the collection and enforcement of child support payments happen?
You and the other parent can agree to have private collection of child support, such as payment to be made by direct debt to a bank account. This agreement does not have to be in writing.
Alternatively, the Child support Agency can be responsible for collecting and enforcing payments of child support payments, whether payments are to be made under an administrative assessment or a child support agreement.
If you choose private collection and payments get behind or stop, you should contact the Child Support Agency and ask the agency to start collecting for you. The Child Support Agency can take over responsibility for ongoing collection and for any outstanding payments going back three months.
What is the advantage of collection by the Child Support Agency?
The Child Support Agency can arrange salary deductions for the paying parent or arrange for regular payments to the Child Support Agency. If not paid and a debt accrues, the Child Support Agency may take the debtor to court for enforcement of payment.
If the other parent does not put in tax returns for a number of years and then puts them in late, the Child Support Agency will reassess those periods and may show that the other parent should have paid you a lot more in child support for those years.
If the Child Support Agency was responsible for collecting for you over those years, the Child Support Agency will then be responsible for recovering the debt that has arisen. If you were in private collection, then you will have to try and recover the money from the other parent as the Child Support Agency will only take responsibility for the last three months.
Private collection works well if both parents complete tax returns as due and both keep the Child Support Agency up to date with any changes in their circumstances.